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Output growth at slowest pace for five months as residential slows

Construction output has risen at its slowest pace for five months, led by a sharp slowdown in residential building growth.

Construction output has continued to grow, but the pace of expansion has been at its slowest rate since May, according to data from the Markit/CIPS UK Construction PMI.

The index stood at 61.4 in October, down from 64.2 in September, although it still remained ahead of the long-run survey average of 54.5.

Following continued growth in October, output has increased for the past 18 months, which represents the longest period of growth since the onset of the financial crisis in 2008.

Commercial was the strongest sector last month, despite showing its slowest pace of growth in five months.

Though still growing, the latest increase in housing activity was the weakest for 12 months and significantly slower than the previous month.

Civil engineering activity was the weakest-performing sector, but the rate of growth only slowed slightly since September, and still remains well above its long-term average.

Commenting on the survey, Markit senior economist Tim Moore said: “Housebuilding activity still increased at a strong pace overall, but the sharp growth slowdown since this summer reflects greater caution towards new development projects amid tighter mortgage lending conditions and renewed uncertainties about the demand outlook.

“Despite signs that the housebuilding recovery has lost some intensity, UK construction companies remain highly upbeat about their overall prospects for growth.”

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