London, July 4 – Activity in the UK construction sector continued to grow in June for the fourth consecutive month, but the pace of growth slowed markedly. This was mainly due to a decline in activity in the housebuilding sector, according to data from S&P Global published by RTTNews.
The Purchasing Managers’ Index (PMI) for the construction sector fell to 52.2 in June from 54.7 in May. This represents a significant slowdown in the pace of growth in activity in the sector, as a reading above 50 indicates expansion and below 50 contraction. The result also fell short of economists’ expectations, who had forecast a decline in the index to 53.6 points.
The slowdown in growth was largely due to a decline in housebuilding activity, which returned to contraction. In contrast, the strongest growth was again seen in commercial construction, which includes shops, warehouses and office space. The pace of decline slowed, but still reached a two-year high in May. Growth also continued in civil engineering, but at a slower pace.
Developments in the construction sector are influenced by a variety of factors, including material prices, labor availability and interest rates. In recent months, material prices have risen and labor availability has worsened, which has led to a slowdown in growth. Despite this slowdown, however, the UK construction sector remains resilient and is expected to continue to grow at a moderate pace in the coming months.
Conclusion:
- UK construction activity grew for the fourth consecutive month in June, but the pace of growth slowed.
- The main reason for the slowdown was a decline in activity in the housebuilding sector.
- In contrast, the strongest growth was seen in commercial construction and growth continued in civil engineering.
- The UK construction sector is expected to continue to grow at a moderate pace in the coming months.
Table:
| UK Construction PMI | May 2024 | June 2024 |
|---|---|---|
| Value | 54.7 points | 52.2 points |
| Developments by sector | Status | Comment |
|---|---|---|
| Housebuilding | Decline | Activity returned to decline. |
| Commercial construction | Growth | Strongest growth, pace slowed slightly. |
| Civil engineering | Growth | Growth continued, but at a slower pace. |
Additional notes:
- The data for the PMI survey are collected from a panel of respondents in the construction industry.
- The respondents are asked about their business activity in the previous month compared to the same month of the previous year.
- The responses are then used to calculate a PMI index, which is a number between 0 and 100.
- A reading above 50 indicates that activity is expanding, while a reading below 50 indicates that activity is contracting.
