Construction industry growth hits eight-month low
Growth in the construction industry fell to an eight-month low today as the driving force of the UK's recovery suffered a blow to confidence.
The latest Markit/CIPS Purchasing Managers' Index (PMI) survey - where a reading above 50 indicates growth - fell from 53.8 in September to 51.6 in October. The market had expected a more modest fall to 53.
The figures are worrying because the construction industry has been a major factor behind the UK's economic growth this year.
While the construction sector only accounts for 6.3% of GDP, it was responsible for half of the 1.2% GDP growth in the second quarter and a quarter of the 0.8% GDP growth in the third quarter.
However, the Government spending cuts have undermined its confidence, according to the report, and there are now fears that the sector will not provide the same boost to Britain's economic recovery in the current quarter.
Markit economist and report author Sarah Ledger said: "Whilst the UK construction sector managed to record growth in October, it seems more evident that the current expansion has peaked.
"Looking ahead therefore, it may be reasonable to assume that construction will have less of a positive impact on GDP compared to Q3."
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