UK construction growth reaches 7-month high

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The UK construction industry had a very strong month in June, with growth reaching a seven-month high, according to the latest Construction Purchasing Managers' Index (PMI) from IHS Markit and the Chartered Institute of Procurement and Supply (CIPS). This is good news for a sector that was hampered by snowfall earlier in the year, which slowed down productivity.

The Construction PMI posted a score of 53.1 in June, an increase of 0.6 points from May's score of 52.5. IHS Markit and the CIPS use a score from one to 100, where anything above 50 denotes growth and anything below that indicating a slowdown. This is the third consecutive month the PMI has reported growth in the construction sector.

In fact, this is the fastest upturn that has been observed by the PMI in seven months, since November 2017. There are signs that this growth will continue in the short-term as well, as June saw the sharpest increase in new construction orders since May 2017, promising a strong summer for builders.

While performance was good across the board, residential construction was the best-performing area. Commercial building also did very well overall, with work rising at the fastest rate in months. Civil engineering activity also rose in June, but only slightly; in fact, the rate of growth for this area was the lowest seen in three months.

This has led to an increase in business optimism, which is good to see after the seven-month low in this area observed in May's PMI report. However, construction companies are still feeling more negative in the long term than they have on average.

Duncan Brock, group director at CIPS, said: "With the fastest rise in new orders since May 2017, it appears the brakes are off for the construction sector. Despite being hampered by economic uncertainty, firms reported an improved pipeline of work as clients committed to projects and hesitancy was swept away."