UK construction PMI at five-month low in October
By Michele Maatouk
Date: Thursday 05 Nov 2020
(Sharecast News) - UK construction sector growth slowed more than expected in October, according to a survey released on Thursday.
The IHS Markit/CIPS construction purchasing managers' index fell to 53.1 from 56.8 in September, missing expectations for a reading of 55.0 and marking the slowest rate of expansion in five months.
A reading above 50.0 indicates expansion, while a reading below signals contraction.
House building was the best-performing sector by far, with survey respondents pointing to pent-up demand and a boost from improving housing market conditions in recent months. Commercial activity also rose, albeit at the weakest rate of expansion in five months, while civil engineering activity declined for the third month in a row, at its fastest pace since May.
Tim Moore, economics director at IHS Markit, said: "The construction sector was a bright spot in an otherwise gloomy month for the UK economy during October. Another sharp rise in house building helped to keep the construction recovery on track, albeit at a slower speed than in the third quarter of 2020. Commercial work also contributed to growth in the construction sector, while civil engineering remained the main area of concern as activity in this category dropped for the third month running.
"Supply chain difficulties persisted in October, as signalled by a sharp lengthening of delivery times for construction products and materials. Purchasing prices increased as a result of demand outstripping supply for construction inputs, with the rate of cost inflation hitting an 18-month high in October."
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