Construction PMI Falls In October

Growth Slows, But 'Outlook Still Strong' For Sector

04.11.2014

The UK's construction industry grew at the lowest rate in five months during October, the latest Markit/CIPS construction purchasing managers' index (PMI) has shown – although construction managers remain upbeat about growth prospects for the future.

The PMI fell from 64.2 in September to 61.4 in October, a steeper decline than a Reuters poll had forecasted. However, it also marks 18 months of the index remaining above the 50 threshold, denoting positive growth for a year and a half: the longest sustained period since the financial crisis.

Tim Moore, an economist at Markitt, said October’s figures are evidence that the cooling housing market is beginning to impact the residential building sector.

"House building activity still increased at a strong pace overall, but the sharp growth slowdown since this summer reflects greater caution towards new development projects amid tighter mortgage lending conditions and renewed uncertainties about the demand outlook," he said.

Markitt said the overall outlook for construction firms was strong in October, with only a modest slowdown in commercial and civil engineering work and a rise in investment spending.