United Kingdom construction growth slows in October – PMI

However, the PMI’s view of construction contrasts with last month’s official data which showed the sector contracted by 2.2 per cent in the third quarter, dragging down overall gross domestic product (GDP) growth by 0.1 points over the period. That said, the rate of backlog accumulation remained weak.

“Businesses were the least upbeat about their one-year outlook for activity in 2015 so far, with a few survey correspondents commenting on economic fluctuations”, Mr Kolodseike said.

Germany’s private sector expanded in October, a survey showed on Wednesday, suggesting that Europe’s biggest economy was on a solid growth path going into the fourth quarter.

The Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) edged up to 48.3 in October from 47.2 in September, the lowest since March 2009. More than half a year after the European Central Bank started pumping in 60 billion euros a month of new money through its quantitative easing program, the currency bloc’s relatively downbeat manufacturing survey may make disappointing reading for policymakers.

“There were signs of the economy stabilizing and the pressure to maintain growth has been alleviated”, he said. Any figure above 50 indicates growth. Although Markit did point out that it was still the second-weakest figure since May 2013.

Input buying increased at the steepest rate for nine months in October.

The results for October are a significant improvement from the September survey, where the index reported a figure of 51.8 from industry feedback.

“The pace of growth looks set to remain frustratingly weak given the amount of stimulus in play at the moment”, said Markit’s chief economist Chris Williamson. The index was at 53.3 in September.

Firms continued to add to their headcounts, but the rate of job creation slowed to a four-month low, with a few producers of intermediate and investment goods laying off staff.

In Britain, which doesn’t use the euro, services companies rebounded more strongly than expected last month, suggesting economic growth picked up speed as the final quarter began.

A PMI for the dominant service industry also rose, reaching 54.1 compared to September’s seven-month low of 53.7.

“There was a welcome quickening (to a three month high) in the rate of expansion in New Orders in October”. Expectations of a United States interest rate hike have heightened, which could let to a UK interest rate rise, as often the Bank of England has followed events across the Atlantic.