Forex News

UK October construction PMI 53.2 vs 50.5 expected

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  • Prior 52.3

That’s a surprise beat as construction activity continues to rise in October, though new orders were seen falling for the first time since May 2020. The latter is a worrying development, with business expectations dropping to 29-month low not really helping with the outlook. S&P Global notes that:

“Construction output has staged a modest recovery after the downturn seen through much of this summer, with growth hitting a five-month high in October. Commercial work was the best-performing area of activity as delayed projects moved forward, while increased house building also provided a positive contribution to overall workloads.

“However, the forward-looking survey indicators highlight that growth will be harder to achieve in the coming months as rising borrowing costs, economic uncertainty and cost constraints all had a negative influence on order books in October. The reduction in total new work was the first since May 2020 and this fuelled increased concerns about longerterm tender opportunities.

“Business optimism regarding the year ahead slumped in October and was by far the weakest since the early pandemic months. Construction firms cited concerns about a broad-based decline in client demand due to cutbacks on non-essential spending among clients, although some noted that growth linked to green energy projects, planned infrastructure spending and success in niche markets could help to offset the UK economic headwinds.”