UK construction downturn eases as house-building improves, commercial work tanks

By Andy Bruce

MANCHESTER, England (Reuters) -The downturn in Britain's construction industry abated slightly in June as homebuilding returned to growth, but commercial building activity tumbled thanks to mounting worries about the economy, a survey showed on Friday.

The S&P Global UK Construction Purchasing Managers' Index rose to 48.8 from 47.9 in May, a six-month high but still below the 50 threshold denoting growth. A Reuters poll of economists had pointed to a reading of 48.4.

The survey showed a split picture of Britain's construction market. Housing activity expanded for the first time since September but the commercial sector contracted at the fastest rate since mid-2020, during the onset of the COVID-19 pandemic.

"Total new orders fell at a faster pace as many construction companies signalled reduced overall workloads due to unfavourable domestic economic conditions and fragile confidence among clients," said S&P Global economics director Tim Moore said.

The survey showed business activity expectations sank in June to the lowest level since December 2022.

PMI data earlier in the week showed a faster-than-expected upturn in the dominant services sector, while manufacturing continued to contract.

The all-sector PMI rose to 51.7 in June from 50.0 in May, its highest level since October.

(Reporting by Andy Bruce; Editing by Hugh Lawson)