By Daniel Hunter
Growing concerns of the growth of the economy hit the UK construction industry in October, according to a closely watched survey.
Yesterday (Monday), the Markit/KPMG Purchasing Managers' Index (PMI) for the manufacturing sector grew at a faster pace. But the same can't be said for the construction sector.
The Markit PMI for construction, which is conducted with CIPS, showed that the sector grew at its slowest pace for five months in October.
The PMI reported a figure of 61.4 in October, down from 64.2 in September. Any figure above 50 indicates growth, so it still suggest strong growth in October and is well above the survey average of 54.5.
"October's survey provides the first indication that the chill winds blowing across the UK housing market have started to weigh on the booming residential building sector," said Tim Moore from Markit.
Jeremy Cook, chief economist at the currency exchange company, World First, said:
“Although this reading is still very strong, it is still the weakest since May of this year, mainly as a result of slowing housing market activity.
“Developers seem to be increasingly cautious about new projects following a slip in buyer and builder confidence in the future prospects of the industry, falls in mortgage approvals and the belief that borrowing costs are to rise soon.
“Jobs are increasing well as the pipeline and overflow of work continues to be mopped up, but this looks likely to slow as new work orders decline.”
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