The construction sector was saved from collapse by housebuilding, as an increase in residential work was recorded in June for the first time in nine months, according to recent data.
S&P Global's purchasing managers' index (PMI) for construction indicated a slight improvement in the sector from May, with the decline in total business activity at its lowest level since January, as reported by .
The research highlighted that higher levels of residential work, which rose to 50.7, above the 50-point benchmark figure for neutrality, were due to "more stable demand conditions."
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However, the recent increase in stamp duty rates on properties priced from £125,000 upwards, which came into effect in April, risked deterring home buyers and suppressing demand, according to recent research by Rightmove.
Despite this, firms surveyed by S&P Global reported that the increase in new projects and sales pipelines helped to stimulate housebuilding, the only category of construction work to expand in June.
Economists predict that the construction sector could see further growth in the coming months as the "stamp duty disruptions" subside.
"Housing activity could perform particularly well going forward," said Elliott Jordan-Doak from Pantheon Macroeconomics.
"The Office for Budget Responsibility (OBR) predicts a strong rise in dwellings completions due to the government's planning reforms, while the FCA's recommendations to ease affordability calculations for mortgagors could also unlock demand."
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"Admittedly, sticky interest rates and chaotic policymaking in the US are likely to weigh on 海角视频 [construction] growth but probably not much."
Housebuilding boost overclouded by pessimism
Other segments such as commercial construction and civil engineering recorded subdued workloads, with commercial activities experiencing the steepest decline in over five years.
Additionally, staffing figures have dwindled, influenced by increased employment taxes imposed by Chancellor Rachel Reeves, while purchasing costs for materials like concrete and timber have escalated, even though the overall inflation rate has softened for the third consecutive month.
Compounding concerns, forecasts for the coming year have slumped to their lowest point in two and a half years owing to anticipated reductions in business investment.
"Recent PMI readings appear to have been overly pessimistic and have probably been reflective of a shift in business sentiment rather than activity," commented EY ITEM Club's economist Matt Swannell.
Remarkably, despite the survey consistently indicating negative outcomes throughout this year, official data suggests that construction activity has actually amplified year-to-date. Nonetheless, it is evident that the sector is poised to encounter several challenges in the ensuing quarters.