The UK's construction industry experienced growth last month as the sector bounced back from a four-month post Brexit slump.

The Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) registered 52.3 in September, up from 49.2 in August and above the 50.0 no-change value for the first time since May.

Compared to July's seven-year low, the new reading was boosted by a solid rebound in residential activity, with a number of firms citing resilient demand for residential building work and generally improving market conditions.

Civil engineering activity also rose at its fastest rate since March, while commercial construction activity decreased for the fourth month running. However the latest fall was only modest and slowest recorded since the downturn began in June.


In addition, new work increased for the first time since April, with anecdotal evidence suggesting signs of improving domestic economic conditions. It is thought a rise in housing-related demand drove up volumes of new work in September, leading to a moderate rise in employment levels across the industry. However sub-contractor levels continue to fall at one of the fastest rates since late-2013.

While some reports suggested exchange rate depreciation had pushed up the cost of construction materials, Senior Economist at IHS Markit Tim Moore said firms appear "reasonably optimistic" on the near-term outlook. However, he warned the sector remains on a "much weaker growth trajectory" that what was seen at the start of 2016, which "contrasts with the export-led surge in manufacturing production during September".

David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, added: "The sector still faces challenges with continuing pressures on input prices resulting from the weaker pound and the lingering uncertainty of the Brexit process and how it will impact on future business."

(LM)