UK Construction Industry Reaches Two-Year High in Production Growth

UK: Britain's construction industry experienced its fastest production growth in two years, driven by increased demand and easing cost pressures. The purchasing managers' index (PMI) from S&P Global, which tracks sector activity, climbed to 54.7 in May from 53 in April, surpassing the key threshold of 50 that indicates expansion and exceeding economists' expectations of 52.5.

This growth was propelled by a steady rise in new orders as firms secured new contracts and resumed work on previously delayed projects. Improved supply chains led to a slowdown in input cost inflation, further benefiting businesses. This upturn in new orders prompted companies to increase employment for the first time in five months and boost purchasing activity after an eight-month decline.

Commercial building activity surged, reaching a two-year high in output, while housing and civil engineering also saw expansion in May. Business confidence reached its highest level in three months, fueled by growing demand and optimistic economic forecasts. Expectations for lower borrowing costs and a brighter economic outlook are anticipated to further drive construction output growth over the next year.

Source: Bloomberg