UK construction sector PMI stronger than expected

The Markit/CIPS purchasing managers´ index for the month of October has come in at 53.9 points, well ahead of the market consensus of 50.2.

The above took place on the back of renewed growth in new business, with firms continuing to recruit staff and raise buying activity. Nonetheless, input costs are reported to have intensified and positive sentiment was the weakest for nearly three years, even if UK constructors remain optimistic, overall, for the coming year.

Commenting on the report, David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said:

“UK construction output experienced a rebound in October, and accelerated at some pace after a broad stagnation in September. It’s still nothing to get excited about however. Due to current economic conditions, it may be some time yet before we start seeing the sustained growth the sector really needs. On the plus side, reports of new contract wins from previously quoted projects and some advance orders for 2012 led to the steepest increase in new business since the spring. Across the sector as a whole, confidence about future business activity plunged to its lowest in almost three years, with optimism fading as constructors come to recognise that there are more challenges yet to come. The housing sector continued to deteriorate in October with a decline in activity recorded for a fifth successive month.”

Source : ShareCast
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