Construction growth hits eight-month low
Published: 03 November, 2010
LONDON: Figures for construction industry growth hit an eight-month low. The latest Markit/CIPS Purchasing Managers' Index (PMI) survey – where a reading above 50 indicates growth – fell from 53.8 in September to 51.6 in October. The market had expected a more modest fall to 53.
The construction industry has been a major factor behind the UK's economic growth this year: although construction only accounts for 6.3% of GDP, it was responsible for half of the 1.2% GDP growth in the second quarter and a quarter of the 0.8% GDP growth in the third quarter.
Government spending cuts have undermined its confidence and there are fears that the sector will not provide the same boost to Britain's economic recovery in the current quarter, the report said.
Sarah Ledger, Markit economist and report author, said: "While the UK construction sector managed to record growth in October, it seems more evident that the current expansion has peaked. Looking ahead therefore, it may be reasonable to assume that construction will have less of a positive impact on GDP compared to Q3."