September sees sharpest expansion of construction output for eight months

Strong output growth was maintained across the UK construction sector in September, but new order growth and job creation both eased to their lowest rate for four months, according to the latest Markit/CIPS UK Construction PMI.

September sees sharpest expansion of construction output for eight months

Growth was maintained thanks to sharp rises in housing, commercial and civil engineering activity, with survey respondents widely linking sustained construction output growth to the improving economic backdrop and an associated improvement in clients’ willingness to spend.

Adjusted for seasonal influences, the Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI) posted 64.2 in September, up fractionally from 64.0 in August. The latest reading signalled a sharp expansion of overall construction output that was the steepest since January (and the second-fastest seen over the past seven years).

September data pointed to a further moderation in job creation across the construction sector from July’s survey-record high.

Pressures remain on skilled staff shortages, and construction companies pointed to ongoing supply chain bottlenecks in the wake of strong demand for construction materials in September

Tim Moore, author of the Markit/CIPS Construction PMI, said: “Looking ahead, construction firms are more cautious about their prospects for output growth than at any time since October 2013.

“Although positive overall, a range of factors tempered business optimism in September, including strong cost pressures, concerns about skilled labour supply and signs that house building growth has cooled from the multi-year records set earlier in 2014.”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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