Growth of construction activity slowed in October, with the PMI falling slightly below forecast to 54.3 from September's 57.2. Despite the deceleration, the index remained above the 50.0 threshold, signalling continued expansion for the eighth month. Civil engineering performed best (56.2), driven by demand for energy infrastructure projects. Commercial work also expanded (52.8), albeit at a slower rate, while house building saw a slight contraction (49.4) due to elevated borrowing costs and Autumn Budget uncertainties.

New orders grew solidly but did not match September's highs, constrained by political and cost-of-living pressures. Firms reported robust sales pipelines and tender opportunities, indicating an improving economic environment. Employment increased by the most in three months as businesses boosted hiring to meet demand.

Input costs rose due to higher raw material prices, though inflation eased compared to September. Supplier delivery times improved for the third month, though some firms cited international shipping disruptions. Business optimism deteriorated to its lowest in 10 months, with concerns about economic and political uncertainties weighing on future growth prospects. This latest update puts the UK RPI at minus 13 and the RPI-P at minus 13, meaning that economic activity is falling a little short of market expectations.

The construction sector PMI is forecast to slip to 56.0, down from September's unexpectedly high 57.2 but still well in positive growth territory.

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.