Markit/CIPS UK Construction PMI released for October

Construction industry output rose again in October according to the latest Markit/CIPS UK Construction PMI figures.

Business activity increased at its quickest rate since March.

The construction PMI reading for October was 52.6, up slightly from September’s 52.3 and above the threshold for growth of 50.0.

As per September’s figures, residential housing activity was a key driver of growth. There was a solid increase in residential building work, with the rate of expansion was only marginally less than September’s eight-month high.

Commercial activity stabilised for the month, while civil engineering saw a slight decrease and was the weakest performing sector.

There was moderate growth for new business but it was still down on the figures from the first quarter of this year.

Employment and purchasing activity also increased during October. The rise in input buying was the quickest since March, which led to a sharper decline in supplier performance in October.

Tim Moore, Senior Economist at IHS Markit said: “The UK construction sector has started the fourth quarter in a positive fashion, with the latest survey data revealing a moderate rebound from the downturn seen during the summer.”

Some companies reported that uncertainty stemming from Brexit was putting some projects on hold. Mr Moore said the industry still had economic concerns that was holding back investment spending.

He said: “While business activity has picked up since the third quarter, the recent phase of new order growth has been the weakest for three-and-a-half years.”

“Subdued new order intakes contributed to a fall in construction sector business confidence for the first time since July. At the same time, a sharp pace of input price inflation added to construction firms’ anxieties about the year-ahead business outlook, with higher costs overwhelmingly linked to supplier price hikes in response to the weak pound.”

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