Construction buyers saw a return to industry growth for the first time in six months in March.
The bellwether S&P Global UK Construction Purchasing Managers’ Index rose from 49.7 in February to 50.2 in March.
Crucially it was above the 50 growth mark for the first time since August 2023.
Adding to signs of a recovery, new orders expanded at the fastest pace since May 2023.
Civil engineering was the best-performing sector in March with increased work on infrastructure projects and resilient demand in the energy sector.
House building and commercial construction activity were both broadly unchanged but the stabilisation in residential work represented the best performance for the sector since November 2022.
Construction companies remain upbeat about their prospects for business activity in the next 12 months.
Around 49% of the survey panel anticipate a rise in output levels, while only 11% predict a decline.
Tim Moore, Economics Director at S&P Global Market Intelligence, which compiles the survey said: “UK construction output returned to growth in March as a renewed expansion of civil engineering work was supported by more stable conditions in the housing and commercial building segments.
“The marginal overall rise in total construction activity ended a six-month period of contraction.
“The near-term outlook for construction workloads appears increasingly favourable as order books improved again in March and to the greatest extent for just under one year.
“Construction companies generally commented on a broad- based rebound in tender opportunities, helped by easing borrowing costs and signs that UK economic conditions have started to recover in the first quarter of 2024.
“Staff hiring was a weak spot for the construction sector in March amid lingering concerns about margin pressures and continued risk aversion among major clients. Construction firms often reported delays with replacing departing staff, which led to a decrease in total employment numbers for the third month in a row.
“Supply chain pressures eased across the construction sector as subdued purchasing activity helped to alleviate strains on capacity. Improved supply conditions also led to a slowdown in the rate of cost inflation, which slipped to a three-month low in March.”
