UK builders reported the first fall in orders in two-and-a-half years, fuelling concerns over a recession as rising interest rates, economic uncertainty and cost constraints hit their books.
The decline last month in the sub-index that tracks new orders ended a 28-month period of sustained expansion, the S&P Global/Cips UK construction purchasing managers’ index showed on Friday.
The survey, which measures month-on-month changes in total industry activity, indicated that growth “will be harder to achieve in the coming months”.
Optimism from builders about the year ahead was at its lowest level since May 2020, said John Glen, chief economist at the Chartered Institute of Procurement & Supply.
Builders noted weaker confidence among clients, alongside difficulties from rising input prices and higher interest rates.
The Bank of England raised its key policy rate to 3 per cent on Thursday, its highest point since 2008. The rate was at 0.1 per cent a year ago, but the UK is battling inflation which has reached a 40-year high of 10.1 per cent.
Still, construction output staged a “modest recovery” after the summer downturn, said Tim Moore, economics director at S&P Global Market Intelligence, which compiles the survey.
The S&P Global/Cips UK construction purchasing managers’ index, which measures month-on-month changes in total industry activity, rose to 53.2 in October, from 52.3 in the previous month. A figure above 50 denotes expansion.