The construction industry is witnessing a robust resurgence, with commercial construction and civil engineering leading the charge. According to the S&P Global / CIPS UK Construction Purchasing Managers’ Index, these sectors have shown significant growth, making them key players in the construction industry's recovery.
The rise in commercial construction and civil engineering activity has led to a renewed increase in total construction output. This growth, although modest, is the fastest seen in five months. The industry has seen an uptick in infrastructure projects, office refurbishments, and a steady demand for a range of commercial construction projects.
However, the residential construction sector has been facing challenges. There has been a consistent decline in residential work since December 2022, with construction companies reporting subdued sales due to rising interest rates and economic uncertainties.
Supply chain management in construction has seen significant improvements in July, with delivery times shortening to the greatest extent since 2009. This improvement is attributed to a combination of weaker demand and replenished stocks. However, higher wages costs have put upward pressure on business expenses.
Despite these challenges, the construction industry remains optimistic. Builders are focusing on resilience in their operations and maintaining a steady level of optimism about the next 12 months. The improvement in delivery times for raw materials and lessening of supply chain disruptions have been a positive development for those securing additional work.
The construction industry has also seen a rise in job creation, reaching the highest level in nine months. This is a positive sign for the industry, as it suggests that there is still demand for construction workers.
In conclusion, the construction industry is showing signs of growth, particularly in the commercial building and civil engineering sectors. However, the housing sector continues to face challenges due to economic uncertainties and rising interest rates. Despite these challenges, there is a sense of optimism in the industry, with improvements in supply conditions and job creation. The industry's resilience and adaptability will be key to sustaining this growth in the coming months.