PwC comments on the UK Construction PMI

Commenting on the S&P Global UK Construction PMI® for March,

James Bailey, Director and Housing Leader at PwC UK said:

“March's PMI data indicates a positive market reaction to the improving economic landscape and the subsequent financial stability being provided to both businesses and consumers, with the sector posting 50.2 - a display of slight growth. 

“With housing and residential work, the PMI noted the category saw its best result since November 2022, with respondents referencing stronger order books amid optimism that broader market conditions will continue to improve, which will be crucial to boosting the availability and affordability of housing for consumers, as well as giving developers the right signals to continue with building plans and site activity. 

“A key part of that momentum will be any new government establishing policies that enable and catalyse longer term supply. Planning has long been identified as a key constraint, a view which was shared by the CMA in its recent housebuilding market study. Additionally, industry players are increasingly cautious about the financial capacity of Housing Associations to meet Section 106 obligations, particularly given the need to channel significant investment into existing activity. 

“Any shortfall in new build development activity here has the potential to constrain private supply. A combination of new long-term rent settlement, new grant funding and a reallocation of existing under-utilised grant funding will support existing players and help to attract more private capital into the affordable housing market. We expect more partnerships between housebuilders and private investors to be a trend going forward.”