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: 11/04/2024
Overall increased construction activity was reported for the first time following six consecutive months of decline 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 50.2 in March, up from 49.7 in February, and the highest reading since August 2023. Anything above 50 signifies an overall increase in activity.
Civil engineering showed the highest growth in activity, with reports of increased work on infrastructure projects and demand in the energy sector. The housing and commercial sectors remained broadly unchanged from February.
Turnaround in sales pipelines, greater new business enquiries linked to the improving economic outlook and more stable financial conditions were cited by respondents as contributing to the more positive picture.
However, S&P Global reported there remains caution about staffing levels, with employment numbers down for the third month in a row and reports of delays with replacing departing staff.
S&P Global also reported:
- New orders rising at the fastest pace since May 2023.
- A general rise in new project starts and greater tender opportunities across construction so far in 2024.
- Strong improvement in sub-contractor availability, while rates charged by subcontractors increased at the fastest rate since August 2023.
- Improving materials availability and subdued demand contributed to improving performance.
- 49% of respondents anticipate a rise in output in the next 12 months, 11% predict a decline.
Chief Data Officer Karl Horton said: ‘The survey respondents reported marginal inflation on input costs between February and March. BCIS Materials Cost index is reporting a similar trend. While annual growth remains in negative territory, we have seen marginal monthly increases since the start of the year.
‘Our attention remains keenly on labour supply and skills shortages in the industry. As the survey panel has suggested, the current subdued demand is lessening the effects of shortages, but as output increases, they will become more apparent.’
To keep up to date with the latest industry news and insights from BCIS, register for our newsletter here.
