Bounce-back for builders as output hits a five-month high

Builders rebounded in October when output hit a five-month high.

Construction companies in Britain noted a dip over the summer as rising prices and concerns about the economy stalled buying activity.

But the start of new projects and a large number of unfinished works lifted the construction sector’s reading in the S&P Global Purchasing Managers’ Index (PMI) to 53.2.

Storm clouds: Construction companies in Britain noted a dip over the summer as rising prices and concerns about the economy stalled buying activity.

This was above the crucial reading of 50 which marks no change, and the highest since May.

Commercial construction had the strongest performance, while residential work also expanded. Civil works fell for the fourth consecutive month.

But there were still storm clouds hanging over the sector as business expectations fell to a 29-month low.

Companies said weaker confidence among customers, rising material prices, higher borrowing costs and a drop in work due to political uncertainty were acting as a drag on activity.

The higher costs were “overwhelmingly linked” to energy bills, fuel and rising wages, S&P added.