The UK’s construction sector output rose at the fastest pace in five months during October, according to a recent survey results, but new orders and business optimism dropped sharply.
The S&P Global/CIPS UK construction purchasing managers’ index rose to 53.2 points in October from 52.3 in September. It continued to pick up from the 26-month low of 48.9 in July.
Rising further above the 50.0 no-change mark, the PMI reading shows the activity in the construction sector expanded at a faster rate.
The reading was markedly higher than FXStreet-cited market consensus, which had been expecting growth to slow to a score of 50.5.
“Commercial work was the best-performing area of activity as delayed projects moved forward, while increased house building also provided a positive contribution to overall workloads,” said Tim Moore, S&P Global economics director.
Despite the overall growth in output, new work fell for the first time since May 2020, which increased concerns about longer-term tender opportunities.
“The forward-looking survey indicators highlight that growth will be harder to achieve in the coming months as rising borrowing costs, economic uncertainty and cost constraints all had a negative influence on order books in October.”
Business confidence also fell during the months, and reached its lowest levels since the early months of Covid.
“Construction firms cited concerns about a broad-based decline in client demand due to cutbacks on non-essential spending among clients, although some noted that growth linked to green energy projects, planned infrastructure spending and success in niche markets could help to offset the UK economic headwinds,” Moore continued.
The S&P Global/CIPS UK construction PMI is compiled from responses to surveys sent to around 150 construction companies, with data collected between October 12 and 28.
Source: The Morning Star
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