UK construction activity remains depressed in October

Activity in the UK construction sector continued to shrink in October, according to the latest survey by IHS Markit and the Chartered Institute of Purchasing and Supply, monitored by Kallanish. Civil engineering declined at the fastest pace since October 2009 and business expectations for the year ahead remain subdued.

At 44.2 in October, the headline seasonally-adjusted IHS Markit/CIPS UK Construction Total Activity Index registered below the crucial 50.0 no-change threshold. The latest reading was up from 43.3 during the previous month, but still close to the ten-year low seen in June (43.1), Markit/CIPS says.

Lower volumes of work were recorded across all three broad categories of activity. Civil engineering was the worst-performing area, with business activity falling at the sharpest pace since October 2009. Activity in the steel-intensive commercial construction sector fell for the tenth month running, albeit at the slowest rate since May.

Business optimism towards the year-ahead outlook for construction work remained among the weakest seen since 2012, the survey results revealed. Some construction firms noted that contract awards related to large-scale civil engineering projects had the potential to boost workloads in the next 12 months, although political uncertainty continued to cloud the outlook.

The UK construction sector continues to mirror the malaise in the countries other two areas of major steel consumption, automotive and general manufacturing.