UK construction sector unexpectedly picks up strength in October – PMI

LONDON (Reuters) – The slowdown in the UK construction industry caused by global supply chain problems and labor shortages in the country eased slightly last month, helping growth to recover from its eight-month low, an investigation found Thursday.

The IHS Markit / CIPS UK Construction Purchasing Managers’ Index (PMI) fell to 54.6 in October from 52.6 in September, its lowest level since January. A Reuters poll of economists had indicated a drop to 52.0.

“Numerous reports indicated that material and personnel shortages disrupted work at the site, while rising fuel and energy prices added to cost pressure. Nevertheless, the worst phase of the supply crisis may be over, ”said IHS Markit chief economic officer Tim Moore.

The proportion of construction companies reporting delays from suppliers rose from 63% to 54%, and growth accelerated in the housing, commerce and civil engineering sectors, according to the survey.

He added to signs ahead of the Bank of England’s interest decision on Thursday that the slowdown in the UK economy may have moderated last month, with a similar survey of service companies on Wednesday showing a recovery in the growth.

A separate survey by the Royal Institution of Chartered Surveyors showed strong orders – especially for infrastructure projects – but construction companies in the third quarter faced increasing cost pressures and skills shortages.

The IHS Markit survey also found widespread reports of rising costs among construction companies in October, but to a lesser extent over the past six months.

The all-sector PMI – a combined reading of this week’s manufacturing, services and construction surveys – hit a three-month high of 57.5 in October, from 54.7 in September.