Uptick in construction sector a sign of rising confidence, says Lancashire business advisor

Joe Sullivan, a partner in the real estate and construction team at accountancy and business advisory firm MHA, believes the jump in S&P Global’s Construction Purchasing Managers Index (PMI) data indicates there may be “brighter times ahead” for the sector.

The index jumped to 57.2 in September after the fastest upturn in construction output since April 2022, with growth being recorded across all three subsectors – civil engineering, commercial building and housing.

Joe, who advises construction and property companies across the region, said: “This positive construction PMI data suggests the industry is steadily moving to firmer ground. With the election behind us and more economic stability, there is hope that investment will begin to flood into the sector.

“All three subsectors have shown growth over the last month which is positive news. Order books remain strong, which has been the case for the last few months and there is hope that the delays that there have been in getting building started will now be subsiding.”

Despite the positive outlook, Joe says challenges remain and that businesses will be hoping this month’s budget will deliver greater clarity and certainty for construction and property businesses.

He added: “There are still several headwinds facing the sector. While the announcement of Labour’s housing plan has been welcomed, our clients are telling us that the uncertainty as to further announcements in this month’s budget is causing concern.

“They are hoping that it will bring more clarity, which will provide more confidence to investors, developers and contractors. It is also essential that the Building Safety Act Gateways do not unduly delay the start of projects.

“As Construction PMI is a leading economic indicator, it could mean that we are starting to get an indication that there may be brighter times ahead.”