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Job cuts increase as construction continues growth in September

The UK construction industry continued to grow in September but jobs were cut at the fastest rate in six months, according to the latest Markit/CIPS Construction Purchasing Managers’ Index.

The seasonally adjusted index for September stood at 53.8, up from 52.1 in August.

This growth was led by increases in the commercial and civil engineering sub-sectors – both of which grew faster than in August – but the residential construction sub-sector recorded a marked fall in activity ending a twelve-month period of growth.

Despite growth in both new orders and activity, employment in the UK construction sector fell in September at a marked rate. Anecdotal evidence from those surveyed suggested that companies continued to reassess costs and cut jobs in order to remain competitive.

Construction companies in the UK reported a modest rise in incoming new business received during September, with expansions now recorded for seven consecutive months.

However, the rate of increase eased for a fourth successive month to the slowest in the current growth sequence, with some panellists indicating that new tender opportunities were diminishing.

Confidence among UK construction companies was notably weaker during September, as concerns over public spending cutbacks remained. Sentiment has not been lower since the second half of 2008.