Overall score slipped from May’s number but workloads continue to grow

Construction activity slipped last month but remained in positive territory thanks to an ongoing rebound in commercial work, according to a bellwether index.

The S&P Global UK construction Purchasing Managers’ Index fell to 52.2 in June down from 54.7 in May, the fourth consecutive month that the figure stood above the no-change mark at 50.

The report said: “The main driver of growth continued to come from commercial activity, which increased markedly again in June. That said, the rate of expansion softened from May’s two year high.”

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Increased activity in commercial work helped grow output in June, the PMI index said

Civil engineering recorded a “modest” growth but housing activity slipped back again after a first increase in 19 months in May.

The report added: “Anecdotal evidence suggested that the expansion in total activity reflected the securing of new contracts during the month. Data on new orders showed a fifth consecutive monthly expansion amid successful tendering and a rise in client activity.”

It said firms were taking on more “staff for the second month running. Moreover, the rate of job creation was solid and the sharpest since August last year.”

Jordan Smith, technical director at QS Thomas & Adamson, which was bought by Egis in May, said: “While costs are more stable and activity is mixed across different sectors, there are a lot of projects still being held up – for the most part because of concerns related to costs and economic viability. However, as the figures suggest, there are green shoots of growth appearing, recent inflation data have been heading in the right direction.”

And Kelly Boorman, national head of construction at RSM, added: “With housebuilders predicting a ramp up next year, the supply chain could face challenges in forecasting material volumes to meet new demand, especially as housebuilders are unable to commit to confirm when projects will be delivered.

“This could lead to stockpiling and increased material prices, which alongside rising labour costs, will make it difficult for businesses to preserve margins and deploy labour.”

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