Output grows again but housing continues to stutter

Expansion in the commercial and civil engineering sectors helped keep construction in the black last month with growth increasing to 53, according to a bellwether index.

The figure was up from the 50.2 recorded in March, according to the S&P Global/CIPS UK construction Purchasing Managers’ Index (PMI). Any reading above 50 indicates an overall expansion of output.

Commercial posted a score of 53.9, the first increase since last August, while the 53.6 score for civils was that sector’s strongest performance for nine months.

But housing output fell again last month to 47.6 with sluggish market conditions and mortgage borrowing costs being blamed.

New orders were on the up for the third successive month, albeit at a shallower rate, with confidence among commercial clients edging north.

S&P Global Market Intelligence economics director Tim Moore said: “Total industry activity [rose] at the fastest pace for 14 months amid an ongoing recovery in order books. Demand was boosted by greater confidence regarding the broader UK economic outlook.”

But Brian Smith, head of cost management at Aecom, said: “A second month at or above 50 and continued improvement since December demonstrates some resilience to the sector. However, the outlook remains uncertain. We expect the new work volume trend to be flat or downwards this year, especially while interest rates remain elevated for private developers and the upcoming election diverts attention from public sector project delivery.”