UK construction rises in October

UK construction companies saw a rise in business activity in October, according to survey.

According to a survey, UK construction companies enjoyed a rise in business activity in October, which was largely thanks to another big increase in residential work.

IHS Markit’s senior economist Tim Moore said the news was “positive”.

But he warned that “respondents noted that Brexit-related uncertainty and concerns about the UK economic outlook had held back investment spending”.

He added: “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.”

Markets analyst Neil Wilson said: “The market is holding up very well since the [Brexit] vote.

“Residential housing activity was the key driver and this confirms that in terms of the fundamentals of the UK housing market, nothing has really changed.

“The market remains undersupplied and with interest rates at record lows, there is no reason for buyers not to be found.

“Even if prices are pressured and household incomes are constrained by inflation, at the first-time buyer level there is no lack of demand.”

According to the survey, while construction rose, figures for commercial construction stabilised, but civil engineering decreased slightly during the month. New business in October showed moderate growth, with the increase much weaker than in the first quarter of the year. Input prices increased at the second-fastest rate since July 2011.

Later this week, the Bank of England meets for its latest policy-making meeting, although it is not expected to announce another cut in interest rates.

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