This tool provides a comprehensive, detailed and easy-to-use method of measuring cost movement for building and civil engineering. Widely used in the construction and infrastructure sector to help fairly allocate risk between the client and sub-contractors.
Published: 09/05/2024
Overall increased construction activity was reported for the second month running in the latest update to the S&P Global UK Construction Purchasing Managers’ Index.
The index, which tracks changes in the volume of business activity through a monthly survey of around 150 construction firms, was at 53.0 in April, up from 50.2 in March, the strongest pace of growth since February 2023. Anything above 50 signifies an overall increase in activity.
Civil engineering and commercial work were responsible for the overall construction growth, while housebuilding saw a decline in activity for the 17th consecutive month. High borrowing costs were again cited as impacting on market conditions.
In civil engineering, S&P Global reported that growth was often linked to improved order books and, in the commercial sector, panellists pointed to rising workloads and improved customer demand, in part driven by refurbishment projects.
With almost half of respondents anticipating a rise in output in the next 12 months and only 11% predicting a decline, optimism was higher in April than in the previous month. Respondents included interest rate cuts in the second half of 2024 among their positive expectations for the year ahead.
S&P Global also reported:
- New work increased for the third month running.
- Supplier lead times shortened to greatest extent in 2024 so far.
- A marginal reduction in employment numbers, often linked to non-replacement of voluntary leavers and the conclusion of major projects.
- Increase in subcontractor availability, as well as an increase in subcontractor rates.
Chief Data Officer Karl Horton said: ‘The survey respondents reported modest inflation on input costs between March and April and the BCIS General Building Cost Index is showing a similar trend.
‘High borrowing costs continue to impact the housing sector. Despite reports from the bigger housebuilders of improving consumer confidence, affordability is still a huge issue. We will see what comes out of the next Bank of England’s MPC vote on 9 May and whether a reduction in the base rate is on the cards.’
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