While house-building once again slowed in April 2024, growth in both civil engineering and commercial construction more than made up for it.

At 53.0 in April, up from 50.2 in March, the headline S&P Global UK Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index tracking changes in industry activity – registered in positive territory for the second month running and signalled the strongest pace of expansion since February 2023.

Commercial building (index at 53.9) increased for the first time since August 2023 and was the fastest-growing area of construction activity in April. Survey respondents commented on rising workloads and a turnaround in customer demand, in part driven by refurbishment projects.

Civil engineering activity (index at 53.6) also expanded again in April and at its strongest pace for nine months.

House-building, however, scored 47.6 – anything below 50 indicates negative growth – its worst score since January. Survey respondents again commented on sluggish market conditions and the impact of mortgage interest rates.

New business volumes increased for the third successive month in April, although the rate of expansion eased since March and was only modest. Those reporting higher new order intakes typically cited improved client confidence, particularly in the commercial sector.

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.

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

Purchasing prices rose only modestly in April, with construction firms noting that suppliers were looking 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.

Finally, optimism regarding the year-ahead business outlook edged up in April. 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.