Photographer: Luke Sharrett/Bloomberg

U.K. Homebuilding Grows at Slowest Pace in More Than Two Years

U.K. homebuilding grew the least in more than two years in November, holding back expansion in the broader construction industry.

A monthly Purchasing Managers Index for housing dropped to

55.2 from 59.6 in October. While that’s above the key 50 line that divides expansion from contraction, it’s the weakest reading since June 2013.

A separate gauge of total construction dropped to 55.3 from

58.8. The decline was sharper than economists had forecast and took the index to a seven-month low. Markit’s manufacturing index, published on Tuesday, also fell more than forecast in November to 52.7 from 55.2.

While growth in new construction business and employment also eased last month, Markit said companies remain “highly upbeat” about the business outlook. About 55 percent of survey respondents expect output to increase over the coming year, versus only 5 percent expecting a fall.

Chancellor of the Exchequer George Osborne highlighted housing in his year-end statement to Parliament last week, saying there is a “growing crisis of home ownership” in the U.K. He doubled the housing budget to more than 2 billion pounds ($3 billion) a year and said 400,000 new affordable homes will be built by the end of the decade.

“The latest results suggest that construction companies have become a little more cautious towards year-end,” said Tim Moore, an economist at Markit in London. “However, a healthy flow of new tenders from public and private sector clients is expected to provide a tailwind to growth heading into 2016.”

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