Fastest expansion of construction output since February 2023, survey reports

Business activity growth gained momentum across the UK construction sector in April, largely driven by expansion in the commercial and civil engineering segments and signalling the strongest pace of expansion since February 2023.

PMI breakdown

At 53.0 in April, up from 50.2 in March, the headline S&P Global UK Construction Purchasing Managers’ Index (PMI) registered in positive territory for the second month running, with commercial building (index at 53.9) increasing for the first time since August 2023 and being the fastest-growing area of construction activity in April, and Civil engineering activity (index at 53.6) meanwhile expanded again in April and at the strongest pace for nine months.

Referring to the expansion in commercial building, survey respondents commented on rising workloads and a turnaround in customer demand, in part driven by refurbishment projects.

However, the survey signalled a setback for house building activity (index at 47.6). April data pointed to a moderate fall in residential building work, although the rate of decline was the steepest since January. Construction companies again noted sluggish market conditions and the impact of elevated borrowing costs.


Supplier lead times, meanwhile, shortened to the greatest extent in 2024 so far, which survey respondents linked to rising materials availability and relatively soft demand for construction inputs.

Demand for construction products and materials softened for the eighth consecutive month in April. Lower input buying was partly attributed to destocking. Supplier performance meanwhile improved at the fastest pace since December 2023.


Despite sustained rises in output and new work, the latest survey pointed to another marginal reduction in employment numbers. Lower staffing levels were often linked to the non-replacement of voluntary leavers, due to cost pressures and the completion of major projects.

Sub-contractor availability increased at a robust rate in April, despite a rise in usage for the first time in 2024 to date. Rates charged by sub-contractors also increased at the strongest pace since August 2023.


Purchasing prices rose only modestly in April, with construction firms noting that suppliers had sought to pass on greater wage bills and transportation costs. However, the overall rate of cost inflation was only modest and well below the long-run survey average.

Looking ahead

Nearly half of the survey panel anticipate a rise in output during the next 12 months, while only 11% forecast a decline. Survey respondents mostly commented on improving sales enquiries and more positive signals for customer demand, alongside hopes of interest rate cuts in the latter half of 2024.

Industry reaction

Terry Woodley, managing director of development finance at Shawbrook, commented: “A second consecutive month of growth indicates that the construction industry is starting to stabilise, which should instil some confidence among property developers.

“However, whilst supply chain issues appear to be easing, the expectation that previously predicted interest rate cuts could now be pushed back to later in the year may lead to fluctuating borrowing costs, so developers need to work with a funding partner who has an eye on the long term and can adapt with the market and the developer’s needs. 

“As we approach the next general election, many will also be keeping a close eye on potential house building regulation reforms and proposals, such as Labour’s brownfield building pledge. Steps are being taken in the right direction, but we need to see a multi-faceted approach to reforms to tackle the current shortages and unlock house building potential over the next 12 months.”

Atul Kariya, head of construction and Real Estate at MHA, said: “Today’s rise in construction PMI is in keeping with the activity that we would expect to see at this time of the year. However, the sector has experienced some bumps in the road, but it seems to be turning a corner. Following months of volatility, there are signs that there is some stability returning to the market.

“We are seeing from our clients that there is a sense of firm optimism as we head into the second half of the year and early next with strengthening order books and better cost management. If we do not experience any major setbacks in the next few months, we should expect steady growth this year with a slight uptick next year.”

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