UK construction slide barely slows in October: PMI – Metro US

UK construction slide barely slows in October: PMI

UK construction slide barely slows in October: PMI
By David Milliken

By David Milliken

LONDON (Reuters) – British construction activity shrank for the sixth month in a row in October, and at one of the fastest rates since the 2009 financial crisis, as Brexit worries and a general economic slowdown held back growth.

The IHS Markit/CIPS construction PMI rose to 44.2 in October from 43.3 in September, roughly in line with economists’ forecasts in a Reuters poll, but this was still the third-lowest reading since 2009 and pointed to a fall in output.

“UK construction companies experienced a downturn in business performance during October as political uncertainty and subdued economic conditions again combined to hold back sales,” IHS Markit economist Tim Moore said.

Construction companies reported the seventh successive fall in new work, ordered less raw materials and did not replace staff who quit.

Official data showed construction output rose by 2.4% in the 12 months to August, the most recent figures available, but last month smaller housebuilders reported the weakest demand since 2013.

Britain had been due to leave the European Union on Oct. 31, but Brexit was delayed for the third time this year after Prime Minister Boris Johnson failed to get an exit deal through parliament in time.

House building dropped off in October at the fastest rate since June 2016, the same month as the referendum that set Brexit in motion, while civil engineering projects declined at the fastest rate since October 2009.

Only a partial leveling in the rate of decline in commercial work stopped the index as a whole hitting fresh lows.

“There are clear signs that construction firms are positioning for an extended soft patch for project starts, as highlighted by a further decline in purchasing volumes and another month of cuts to workforce numbers,” Moore said.

(Reporting by David Milliken; Editing by Hugh Lawson)