The bellwether S&P Global UK Construction Purchasing Managers’ Index rose at its fastest rate for 26 months to 55.3 in July from 52.2 in June.
All three categories of construction saw activity increase in July as work on housing projects returned to growth.
Commercial activity increased solidly, but the fastest expansion was seen in civil engineering activity, where the rate of growth quickened to the sharpest in almost two-and-a-half years.
Success in securing new orders was the main factor leading to a rise in construction activity as new business expanded for the sixth month running at the strongest rate since April 2022.
Andrew Harker, Economics Director at S&P Global Market Intelligence, said: “The election-related slowdown in growth seen in June proved to be temporary, with the pace of expansion roaring ahead in July.
“Firms saw the strongest increases in new orders and activity since 2022 as paused projects were released amid reports of improved customer confidence.
“The strength of demand moved the sector closer to capacity, bringing a recent period of improving supplier performance to an end.
“There were also signs of inflationary pressures picking up, something that will need to be watched closely if demand strength continues in the months ahead.”
