The UK construction sector experienced its strongest growth in over two years last month, amid optimism surrounding Labour’s proposed reforms to planning laws.

S&P Global Market Intelligence’s latest health check indicated a robust expansion in housing construction, alongside commercial property and infrastructure. This upturn signals a promising recovery from last year’s recession.

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.”

Kelly Boorman, national head of construction at RSM UK, commented: “The headline construction PMI in July reached the highest level since May 2022, showing the industry is continuing its recovery. This reflects positive sentiment in response to the government’s focus on local housing targets with greater transparency towards planning and infrastructure.”

However, Harker cautioned about rising prices due to increased demand, noting, “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.”

Jordan Smith, technical director at property consultancy Thomas & Adamson, added: “The growth in construction activity is beginning to pick up pace again, with genuine optimism that the new government’s plans will act as a further catalyst for the sector as a whole.”