Construction growth slows in October amid housebuilding slowdown and Budget uncertainty

Construction output growth slowed in October amid caution ahead of last month’s budget.

The S&P Global UK Construction Purchasing Managers’ Index (PMI) showed a score of 54.3 in October down from a 29-month high of 57.2 in September.

Despite the lower growth, the index was above the 50% no change mark for the eighth successive month while the score of 54.3 was above the average score in the first half of the year.

Civil engineering with a score of 56.2 was the fasting growing category of construction output in October, with survey respondents noting rising demand across a range of energy infrastructure projects, especially renewables.

Commercial work expanded by 52.8 but the number for housebuilding was 49.4, signifying a drop in output and the first in the sector since June.

“Some construction companies noted that elevated borrowing costs and uncertainty ahead of the Autumn Budget had constrained demand,” S&P Global said.

Similarly, S&P said total new work increased in October but at a lower rate than September while construction job creation increased to a three-month high.

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Tim Moore, economics director at S&P Global Market Intelligence, said: “The construction sector signalled another month of solid output growth in October, despite being unable to match the highs seen in September.”

Aecom head of cost management Brian Smith added: “With demand set to strengthen as 2025 approaches, the outlook is certainly brighter and a much-needed period of economic stability will stimulate a recovery in private sector investment.”