Business

UK construction growth slows to five-month low

New home under construction Image copyright Getty Images

Growth in the UK construction sector fell to a five-month low in October as home building slowed sharply, a closely-watched survey has suggested.

The Markit/CIPS UK construction Purchasing Managers' Index fell to 61.4 in October from 64.2 the month before. A figure above 50 indicates growth.

The fall was steeper than economists had forecast, but was affected by house building which saw its slowest rate of growth for a year.

Civil and commercial work also slowed.

"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, senior economist at Markit.

Companies 'upbeat'

Markit said that some respondents blamed less favourable market conditions for "greater caution" among clients, causing delays to the launch of new development projects.

It said tighter mortgage lending conditions and "renewed uncertainties" about demand had helped to drive the slowdown.

Since April, lenders have had to make more detailed checks before approving mortgages.

Despite the slowdown, the construction sector has now expanded for 18 months in a row, marking its longest continuous period of growth since the start of the financial crisis in 2007.

And Markit said construction firms reported a strong outlook overall, with more than half of firms expecting output to increase over the next year.

"Despite signs that the house building recovery has lost some intensity, UK construction companies remain highly upbeat about their overall prospects for growth," added Mr Moore.

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