It appears that UK construction growth is slowing. This is unfortunate as the construction sector boosted the economy’s third quarter figures. October’s numbers show the construction growth for that month to be the weakest in eight months.
The Markit and Chartered Institute of Purchasing and Supply construction PMI fell to 51.6 in October from September’s 53.8. While the index fell any number above 50 is still considered growth.
Sarah Ledger, economist at survey compiler Markit said: “Whilst the UK construction sector managed record growth in October, it seems more that the current expansion has peaked.”
Ms. Ledger believes that construction will have less of a positive impact on the GDP in the future when compared with the third quarter. She said constructors were less confident due to the health of the economy, public spending cuts, and job cuts.
David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: “This data is particularly nerve-racking given the boost the construction sector gave to the overall GDP growth last quarter … the high hopes of earlier in the year seem to have given way to dire predictions on what the future may hold.”
The report showed that housing and civil engineering sectors dropped in October, while commercial construction increased. Actual evidence of the increase could be seen in London as previously halted projects such as the Leadenhall Building, or Cheesegrater Building, and Walkie Talkie building were once again actively under construction.
“Nonetheless, confidence remained weak in the context of historical data, as panelists were cautious over the potential impact on activity that will arise from cuts in government spending,” the survey said.