6th Nov 2024 09:56
(Alliance News) - The growth in the UK construction sector was slower than anticipated in October, as housebuilding fell into contraction territory, data published by S&P Global showed Wednesday.
The headline S&P Global UK construction purchasing managers' index fell to 54.3 points in October from 57.2 in September. Falling back towards the neutral 50-point mark separating growth from contraction, it indicates the pace of growth slowed. The reading underperformed against the FXStreet-cited market consensus of 56.0 points.
"Higher levels of new business encouraged additional staff recruitment in October. Moreover, the rate of job creation accelerated to a three-month high. Greater demand for staff was recorded in spite of a decline in business optimism regarding growth prospects for the year ahead," said S&P Global.
Notably, housebuilding was the only broad category of construction work to register a fall in output during October, with the sub-index at 49.4 points. This was down sharply from 54.3 points that S&P Global reported a month ago for September.
S&P Global said: "Construction companies continued to boost their purchasing activity in October, which was mainly linked to greater workloads and forthcoming new project starts. However, the latest increase in purchasing activity was only marginal and the weakest since the current phase of expansion began in May."
Tim Moore, economics director at S&P Global Market Intelligence said: "Total new work expanded at a solid pace in October, adding to signs of a robust improvement in order book pipelines across the construction sector in the second half of 2024. As a result, construction companies added to their payroll numbers at an accelerated pace. However, business optimism remained relatively subdued in comparison to the highs in the first half of the year, with output growth expectations now the lowest since December 2023."
The construction PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 150 construction companies in the UK. The responses were collected between October 10 and 30.
By Tom Budszus, Alliance News slot editor
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