Optimism for construction firms as sector welcomes return to growth

The construction sector is returning to growth following a difficult few months and firms will be able to plan for the long term once political uncertainty is removed after the general election.

This was the view of Joe Sullivan, partner at Lancashire-based accountancy and advisory firm MHA, speaking about the latest S&P Global UK Construction Purchasing Managers' Index (PMI), with the index rising to 54.7, its highest since May 2022.

Joe claimed the results were ‘very positive news for the sector’.

He said: “After months in the doldrums, there are definitely green shoots visible, which should continue throughout the summer months, as it typically does as construction output increases.

“The significant increase in the commercial category shows that the industry is now on a firmer footing than it has been for a considerable time, particularly given the slightly more positive economic indicators and the potential for a cut in interest rates later in the summer.

“Our clients are telling us that things are slowly, steadily and cautiously starting to fall into place after a period of uncertainty, which will enable them to start making longer-term decisions.”

Joe added the announcement of the election would be welcome news as it would provide stability to the industry after July 4.

“However, it is surprising that with housing being one of the major components of the UK economy, there has so far been very little debate about how any of the parties are planning to deal with some fundamental challenges in the sector – not least the significant shortfall in trained, younger workers,” he added.