Construction PMI: Delivery backlog is industry's saving grace as future activity slows, warns RSM UK

According to the latest PMI data by IHS Markit and CIPS, the headline construction PMI fell to 52.6, down from 56.4 in May, showing the steepest monthly fall since January 2021. 

While this indicates that output in the construction sector in June still grew slightly, the pace of growth slowed significantly. What’s more, the sharp declines in the future activity balances and new orders suggest that growth in output will continue to slow in the coming months. 

Kelly Boorman, partner and national head of construction at RSM UK, said: ‘The Construction PMI in June reflects a reduction in projects and some uncertainty in the market, while a slowdown in growth and future pipeline raises some concerns, with the new orders and future activity indices both seeing marked falls. Businesses continue to deliver a backlog of work and remain confident in their short-term future pipeline, which, coupled with delivery times and some stabilisation in material prices, as seen in the input price index increasing slightly from 84.9 to 85.9, and the change in the suppliers’ delivery times index to 39.6 from 40.3. 

‘Additionally, the impact of the wider geopolitical environment is yet to be seen, but this is adding to industry-wide concerns of longer-term future activity once backlogs have been delivered. Looking ahead, while employment figures currently look strong, the industry continues to access labour with an aging workforce and loss of EU workers post-Brexit.’