Greater London, 6 August 2024: With the newly elected Labour government expected to bring significant changes in planning laws, the UK construction sector saw its fastest growth in more than two years this July.

According to a report by S&P Global Market Intelligence, all areas of the sector—commercial property, housing, and infrastructure—experienced significant expansion. This growth comes as a positive sign that the economy is recovering from last year’s recession.

Andrew Harker, Economics Director at S&P Global Market Intelligence, said: “Continued growth of the UK construction sector in June indicates sustained expansion through Q2. Although there were signs of a slowdown, especially in housing, firms linked this partly to election uncertainty, expecting trends to improve post-election. Confidence for the year ahead remained strong, with firms increasing employment significantly. Inflation pressures were minimal, encouraging expanded purchasing activity and favourable supply-chain conditions.”

Jordan Smith, Technical Director at property consultancy Thomas & Adamson, said: “The growth in construction activity is beginning to pick up pace again, with genuine optimism that the new government’s plans will act as a further catalyst for the sector as a whole.” S&P has backed up this optimism. Notably, S&P’s Purchasing Managers’ Index (PMI), which measures construction activity, rose from 52.2 in June to 55.3 in July, marking the highest level since May 2022. A PMI reading above 50 indicates growth.

The report also mentioned that the success in securing new orders was the key factor behind the rise in activity, with new business expanding for the sixth consecutive month. Kelly Boorman, the national head of construction at the audit, tax and consulting firm RSM UK, said: “The headline construction PMI in July reached the highest level since May 2022, showing the industry is continuing its recovery. This reflects positive sentiment in response to the government’s focus on local housing targets with greater transparency towards planning and infrastructure.”

There is no doubt that the market is infused with positive sentiment at the moment as the new government is expected to be focused on the local housing sector and operate with greater transparency.