The UK construction sector has seen activity growth accelerate to its fastest rate for nearly two-and-a-half years, according to the latest data.
Business activity has increased by 8.5% year-on-year, despite slipping to its lowest level since April. The sector has reported a number of new orders and projects, although some firms have noted that cost pressures and supply chain issues have eased growth.
Higher demand for construction products and materials has been a key driver of growth, with the latest expansion of input buying being one of the fastest seen since early 2022.
Suppliers delivery times have shortened again in September, which was linked to rising stocks among vendors. Some construction companies have noted concerns about the outlook for steel prices and supply conditions due to recent closures of domestic blast furnaces.
Input prices have increased for the ninth month running and at the steepest rate since May. Construction companies commented on higher prices paid for a range of raw materials, as well as the pass-through of higher wages by suppliers. Rates charged by subcontractors increased only marginally and at the slowest pace so far in 2024.
Finally, business activity expectations for the year ahead remained upbeat in September despite slipping to the lowest level since April. Optimism was often centred on prospects for sustained growth in the house building sector.
Tim Moore, Economics Director at S&P Global Market Intelligence, said: “UK construction companies indicated a decisive improvement in output growth momentum during September, driven by faster upturns across all three major categories of activity.
“A combination of lower interest rates, domestic economic stability and strong pipelines of infrastructure work have helped to boost order books in recent months."
