Build for world we live in

Increased housing activity drives fresh construction growth

Increased housing activity drives fresh construction growth

New data has shown that the UK construction sector continued expanding last month, aided by further growth in the delivery of new homes.

The October Purchasing Managers' Index (PMI) published by Markit and the Chartered Institute of Purchasing and Supply gave a reading of 52.6 for the month, up from September's 52.3 and the second successive month above the crucial 50 mark, indicating growth. This had followed three months of contraction either side of the Brexit vote amid investor uncertainty.

Housebuilding was identified in the survey as a key factor in the increased growth, with the rate of increase only slightly less than September, when it hit an eight-month high. Commercial construction stabilised compared with September, leaving civil engineering as the weakest area of activity with another slight decline.

The survey found that there was still some constraint on new work caused by Brexit-related uncertainty, with new order growth lower than earlier in the year. Nonetheless, orders and recruitment continued to rise, with output buying rising at its fastest rate since March.  

Confidence remained in positive territory, with 43 per cent expecting growth in the next 12 months compared with 14 per cent anticipating a contraction, but this was a less upbeat picture than in September and represented the second-lowest level of optimism since May 2013, albeit in the context of a very strong performance in the sector over the past three years.

Commenting on the situation, Markit senior economist Tim Moore 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."

He added that the main concerns of those worried by Brexit included the threat of inflation in the imported materials sector caused by the weak pound.

Construction's overall improvement came alongside positive PMI surveys for the manufacturing and service sectors, providing positive news for the economy as a whole.

Manufacturing remained in a state of positive growth at 54.3, albeit down from September's 55.5, as exporters enjoyed the benefits of the weaker pound. Services improved from 52.6 to 54.5.

Images: iStock

 

--- Ends ---

Return to news index

Build for world we live in