Construction Industry Returns to Growth in March
May 1, 2024
A promising report from S&P Global UK Construction PMI, shows that the construction industry showed positive growth in April 2024, with new business volumes increasing for the third successive month. Business activity growth gained momentum across the UK construction sector in April, stated the report, with solid rates of expansion in the commercial and civil engineering segments.
“The construction sector consolidated its recent return to growth in April, with total industry activity rising at the fastest pace for 14 months amid an ongoing recovery in order books,” said Tim Moore, Economics Director at S&P Global Market Intelligence. “Demand was boosted by greater confidence regarding the broader UK economic outlook”.
This confidence looks well placed, with the latest figures on the economy as a whole painting a positive picture. The UK is finally emerging from recession by growing 0.6% in the first three months of the year. This is the fastest growth for two years and exceeded most analyst’s expectations.
“All the evidence we see is that we have turned a corner,” Andrew Bailey, Governor of the Bank of England told the BBC. “We are now seeing a recovery.”
Supplying the demand
Molson are perfectly placed to supply the increased demand for construction equipment, such as compact excavators and site dumpers, that this recovery will bring. Thanks to our unrivalled relationship with companies such as Hyundai Construction Equipment, we can deliver the equipment our customers need to make the most of the new opportunities available.
Molson Commercial Director, Henry Moore has seen the new optimism appearing on the ground, and in the order books, as well as in the official figures.
“There’s no denying that the construction sector has faced numerous challenges in recent years,” he said. “However, we are starting to see solid signs of recovery, with an increase in orders, from core machines like compact excavators and site dumpers, to investment in larger machinery as companies target growth and bid for larger projects.”
Interest rates hold steady
Interest rates were held steady at 5.25% by the Bank of England this month, but many experts are predicting a downward move soon, as inflation continues to fall towards the Government’s 2% target. This, in turn, will further boost the construction sector, as Henry explains:
“Lower interest rates make loans or finance for construction equipment such as compact excavators and site dumpers more affordable,” he says. “This is essential to ease the cashflow of companies and support them as they seek to take advantage of the growing market.”
Molson offers a range of finance options, which can be tailored to match your company’s overall business strategy as well as the demands of individual projects.
Optimism for the future
Expert economists agree with Andrew Bailey’s assessment that things are changing for the better. The chief economist at KPMG UK, Yael Selfin, says that she expects continued growth for the rest of 2024, stating that “the worst is behind the UK economy”. In fact, the UK has the best growth forecast of any European G7 country for the next six years.
The S&P report reflects this optimism, with construction companies upbeat about their prospects in the coming year. ‘Almost half’ of the businesses surveyed said that they anticipate a rise in output levels, while only 11% predict a decline.
“Molson Group shares the sector’s sense of optimism for the economy,” says Henry. “We stand firmly behind the UK construction industry as it prepares to play its part in building the UK economy.”
For more information on Molson equipment, such as compact excavators and site dumpers, and how Molson finance can help your company access the equipment it needs to make the most of the improved outlook in our industry, get in touch today.
