LONDON (Reuters) – Growth in activity among British construction firms hit a 10-month low in October and house-building slowed for the first time since June, according to a survey that underscores the challenge facing the new government that wants to speed up building of homes.
The S&P Global/CIPS UK Construction Purchasing Managers’ Index slowed to 54.3 last month, below September’s 29-month high of 57.2 – and lower than economists’ average expectation of 55.5 in a Reuters poll.
Tim Moore, economics director at S&P Global Market Intelligence, said some firms delayed decisions ahead of the government’s first budget last week, despite an improvement in domestic economic conditions which boosted demand.
“Government policy uncertainty, fragile consumer confidence and elevated borrowing costs were all constraints on demand for house-building projects,” Moore said.
S&P Global’s gauge of house-building fell to 49.4 from 54.3 in September, the first time since June it has been below the 50 line which indicates growth. Firms attributed weaker demand in part to uncertainty before the budget announcement on Oct. 30.
The Bank of England is expected to reduce interest rates again on Thursday after holding borrowing costs at 5% in September. It made its first cut since 2020 in August.
S&P said civil engineering was the strongest-performing category, with infrastructure projects in energy and renewables boosting the sector. But the commercial sub-sector had its weakest month since March at 52.8.
While businesses reported higher prices for raw materials, they said overall cost pressures eased, helped by increased competition between suppliers.
Job creation was the fastest since July as employment grew for the fifth time in six months.
The all-sector PMI, which combines the services, manufacturing and construction sectors, fell to 52.0 in October from 53.0 in September.
(Reporting by Suban Abdulla; Editing by Hugh Lawson)
