U.K. Homebuilding Falls to 12-Month Low as ‘Chill Winds’ BiteFergal O’Brien
U.K. construction growth cooled more than economists forecast last month as homebuilding slumped to the weakest in a year.
Markit Economics said its Purchasing Managers Index fell to 61.4, the lowest in five months, from 64.2 in September. Economists had forecast a decline to 63.5, based on the median estimate in a Bloomberg News survey. A reading above 50 indicates expansion. A gauge of housing dropped to 61 from 65.8.
The data follow reports in recent months showing housing demand has weakened as new Bank of England rules make it harder to get a mortgage and consumers brace for the prospect of higher interest rates next year. Nationwide Building Society said last month that the housing market has “lost momentum.”
“October’s survey provides the first indication that the chill winds blowing across the U.K. housing market have started to weigh on the booming residential-building sector,” said Tim Moore, senior economist at Markit.
Survey respondents said “less favorable housing-market conditions had resulted in greater caution among clients,” according to Markit. Commercial activity slowed in October, though it remained the strongest-performing category.
A report yesterday showed U.K. manufacturing growth unexpectedly accelerated to the fastest pace in three months in October as buoyant domestic demand offset weakening sales to the embattled euro region. The factory index climbed to 53.2 from 51.5 in September.