Uk Construction Sector Prints Growth

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Uk Construction Sector Prints Growth

UK Construction Sector Prints Growth In March

For the first time since August 2023, an expansion was seen in the UK's construction industry. Although the expansion was not so big, it was still a positive for the UK's construction sector.

This change also highlights that the UK's economy is now going through improvement after going through a recession in 2H2023.

Uk Pmi Touched 50.2 In March

Overall, the S&P Global UK Construction Purchasing Managers' Index went from 49.7 to around 50.2 in March. While the increase was only 0.5 points, what's truly amazing is that the index has moved into an expansion phase. Earlier, all the readings under 50 were a sign of contraction.

The survey gauges the civil engineering, commercial work, and housebuilding in the UK. A look at the finer details shows that all of these sub-sectors also showed growth during March.

The PMI reading from Friday was also in line with other surveys, which also hint at the turnaround of the UK economy. Although the growth is still weak, the important thing is the shift from contraction to expansion. The PMI index also hints at possible growth for the UK's construction firms in the next few months.

According to Tim Moore from S&P Global, an increase was seen in the workloads related to the construction sector. Furthermore, the number of books ordered also showed a favourable increase during March.

But what's driving this expansion in the construction sector? According to experts, rate cuts by the BoE are helping out the UK's economy as well. In 2024, the S&P Global is also hinting at a minimum of 0.75% rate cuts by BoE.

Overall, the increase in the costs faced by the UK companies was the lowest during a 3-month period. At the same time, employment also showed a contraction for the 3rd month in a row.

The one particular spot that hinted at possible weakness for the construction sector was weak staff hiring. However, that could be solved with swift rate cuts from the BoE.

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