Construction activity fairly boomed at quarter-end. The September sector PMI weighed in at fully 57.2, more than 4 points above the market consensus and its strongest reading since April 2022.

The buoyant headline index in part reflected a particularly good month for civil engineering. Here, the subsector PMI climbed to 59.0 on the back of robust demand for renewable energy infrastructure and a general uplift in work on major projects. Commercial building (55.2) also gained momentum as did housing (54.3). Total new orders rose by the most in two-and-a-half years and overall headcount expanded for a fourth time in the last five months. However, while vendor delivery times shortened, input costs still increased at the steepest rate since May 2023. Business expectations for the year ahead eased to their lowest level since April but remained optimistic.

September's findings are surprisingly strong and will leave the BoE's MPC hawks all the more wary about cutting Bank Rate again too soon. Indeed, today's update lifts the UK RPI to 17 and the RPI-P to 11, both gauges now showing overall economic activity running slightly ahead of market forecasts.

Construction sector activity is seen slowing in September but, at a consensus 53.1, the PMI still points to a decent growth.

The Construction Purchasing Managers' Index (PMI) provides an estimate of business activity in the UK construction sector for the preceding month based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 170 construction companies. The panel is stratified geographically and by Standard Industrial Classification (SIC) group, based on the regional and industry contribution to gross domestic product. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The data are compiled by the Chartered Institute of Purchasing and Supply (CIPS) and S&P Global.

The survey is based on techniques successfully developed in the USA over the last 60 years by the National Association of Purchasing Management. It is designed to provide one of the earliest indicators of significant change in the economy. The data collected are not opinion on what might happen in the future, but hard facts on what is actually happening at 'grass roots' level in the economy. As such the information generated on economic trends pre-dates official government statistics by many months.