–Oct CIPS Construction Index 51.6 Vs Originally Reported 53.8
LONDON (MNI) – The rate of growth in the UK construction sector
slowed markedly at the start of the fourth quarter, the Markit/CIPS
construction industry data for October showed.
Construction was one of main drivers of the UK’s economic recovery
in the second and third quarters, but the October CIPS data suggest the
pace of expansion has not been maintained.
The Markit/CIPS Construction Purchasing Managers’ Index for October
came in at 51.6, the weakest reading for eight months. The CIPS report
said only the commercial sub-sector recorded an increase in activity,
while employment fell markedly and government spending cuts were
undermining confidence.
The most recent official data showed construction output increased
4.0% on the quarter in Q3, having risen 9.5% in Q2. Construction added
an estimated 0.25 percentage points to quarterly growth in Q3 out of the
total 0.8% quarterly rise.
The CIPS construction data have tended to show less strong growth
than the official construction numbers and many analysts have raised
doubts over how strong, and sustainable, the reported surge in
construction in the official data really is.
The October manufacturing PMI survey, published Monday, came in
stronger than analysts had expected, rising to 54.9 from 53.5 in
September, posting its first month-on-month rise since May.
Tuesday’s data, however, suggest while manufacturing, bolstered by
exports, is still powering ahead the construction sector is faltering.
“Whilst the UK construction sector managed to record growth in
October, it seems more evident that the current expansion has peaked,”
Sarah Ledger, Economist at Markit, said.
“The month-on-month rise in new business eased once again, with
constructors attributing this partly to reluctant clients that are
concerned over public spending cuts and the health of the general
economy,” Ledger added.
–London newsroom: +44 207 862 7491; email: drobinson@marketnews.com
[TOPICS: MABDS$,M$B$$$,MT$$$$]
