UK construction shoed marginal growth last month but the rate of new business growth was the fastest since May 2023 and business optimism improved to reach the highest in over two years, according to the latest figures from S&P Global Market Intelligence.
Economics director Tim Moore said: “A stabilisation in house building meant that UK construction output was virtually unchanged in February. This was the best performance for the construction sector since August 2023 and the forward-looking survey indicators provide encouragement that business conditions could improve in the coming months.
“Total new orders expanded for the first time since July 2023, which construction companies attributed to rising client confidence and signs of a turnaround in the residential building segment. Meanwhile, the degree of optimism regarding year ahead business activity prospects was the strongest since the start of 2022, in part due to looser financial conditions and expected interest rate cuts.
“However, a protracted downturn in activity has made construction companies cautious about their employment numbers. Staffing levels dropped for the third time in the past four months and the latest round of job shedding was the steepest since November 2020. Purchasing activity also decreased in February, but construction firms continued to cite supply side challenges. Moreover, input costs increased for the second month running as strong wage pressures and renewed materials price inflation placed upward pressure on operating expenses.”
