UK construction sector shows resilience and sustainability gains in August

By April Lara

September 10, 2024

UK construction sustainability gains

In August 2024, the UK construction industry continued its positive trajectory indicated by S&P Global UK Construction Purchasing Managers’ Index (PMI) at 53.6. Albeit this is slightly below July’s 55.3, it shows ongoing growth and marks the sixth consecutive month of activity above the neutral 50.0 mark.

The data highlights strong performance across various industries. Commercial activity led with an index of 53.7 driven by increased sales inquiries and new orders following recent elections. Residential construction saw significant improvements with an index that reached 52.7—the fastest growth in almost two years—thanks to improved political and economic stability. Meanwhile, civil engineering expanded at a more modest rate of 51.8.

Despite stable employment levels and a drop in sub-contractor use, industry sentiment is still optimistic, with half of the respondents expecting increased output over the next year. Concerns about public sector budgets and infrastructure spending persist, but the overall outlook is positive.

A key driver of the construction sector's growth is the government's ambitious plans to reform the planning system, as outlined in the King's Speech. Coupled with this, the sector is also witnessing a significant shift towards eco-friendly building practices driven by the Labour Government's stringent measures to achieve net-zero emissions. This growing emphasis on sustainability is further enhancing the sector's resilience and contributing to the overall economic recovery.

Several notable UK projects and firms are leading the way, such as adopting green materials. For one, the EDGE London Bridge is a new sustainable development at St Thomas Street on London’s South Bank. It aims to turn the 26-floor commercial building into London’s most sustainable office tower, designed to achieve BREEAM Outstanding and WELL Platinum certification.

Another one is the Dalston Lane project in Hackney, London known for its use of mass timber. It highlights the sustainability and aesthetic benefits of mass timber in modern construction.

The industry is also benefiting from increased investment in renewable energy infrastructure. Solar panels, wind turbines, and other renewable energy sources are being added to new buildings to reduce their carbon footprint and deliver long-term cost savings.

The growing emphasis on sustainability and the government’s commitment to planning reform is creating a favourable environment for the sector’s continued growth and success in achieving the UK’s net-zero goals.