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UK construction PMI stabilizes despite dismal underlying sentiment
The construction PMI rose in July, helped by a rebound in civil engineering, while output still points to sluggish improvement ahead.
Guardian Business reports that the UK construction sector shows signs of stabilization as sentiment improves, even though the construction PMI remains at a dismal level. The outlet cited that the July rebound looks better than June but still does not signal a quick rise in activity.
According to the report, the construction PMI increased despite ongoing weakness, consistent with construction sector output falling by about 1.5% on a three month on three month basis. The latest figure also compares favorably with the weaker -3% contraction implied by the June survey.
Guardian Business said the July PMI was boosted by a rebound in civil engineering, where output growth had dropped to levels described as hard to believe for the post-Covid period. The civil engineering output balance rose to 38.3 in July from 22 in June, and the housing activity balance jumped nearly 6 points to 41.8.
The article also noted that commercial activity output falls were the least marked since January, and that forward looking balances suggest further improvement ahead even as new orders continue to fall. It emphasized that sentiment has been too negative for too long, so the outlook is cautious rather than rapidly upbeat.