Construction output across the UK eased during October, according to the latest PMI report.

The headline S&P Global UK Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index tracking changes in total industry activity – registered 54.3 in October, down from 57.2 in September.

But the figure remains well above the crucial 50.0 no-change threshold for the eighth month running – and follows September’s 29-month high.

The latest reading was also well above the average seen in the first half of 2024 (51.4) and signalled a solid expansion of total industry activity.

Civil engineering (56.2) was by far the best-performing category of construction output in October.

Survey respondents again noted rising demand across a range of energy infrastructure projects, especially renewables.

Commercial work (52.8) also expanded in October, but the increase was the weakest since the current period of growth began in April.

House building (49.4) was the only broad category of construction work to register an overall decline in output during October.

This was the first decrease in residential activity since June, but the rate of contraction was only marginal.

Some construction companies noted that elevated borrowing costs and uncertainty ahead of the Autumn Budget had constrained demand.

Total new work expanded at a solid pace in October. Mirroring the trend for output growth, the latest expansion was softer than the two-and-a-half year high seen in September.

Political uncertainty and subdued household demand due to cost-of-living pressures were cited as factors limiting new order growth in October.

That said, many construction companies noted strong sales pipelines and tender opportunities linked to generally improving domestic economic conditions.

Higher levels of new business encouraged additional staff recruitment in October.

The rate of job creation also accelerated to a three-month high. Greater demand for staff was recorded despite a decline in business optimism regarding growth prospects for the year ahead.

Latest data indicated that construction companies were the least confident about their output growth projections since December 2023.

Construction companies continued to boost their purchasing activity in October, which was mainly linked to greater workloads and forthcoming new project starts.

However, the latest increase in purchasing activity was only marginal and the weakest since the current phase of expansion began in May.

Tim Moore, economics director at S&P Global Market Intelligence, said: “The construction sector signalled another month of solid output growth in October, despite being unable to match the highs seen in September.

“Business activity expansion was once again led by civil engineering work. Survey respondents widely commented on strong demand for renewable energy infrastructure projects.

"Commercial construction activity also increased again, albeit at the slowest pace since the current phase of expansion began in April.

“Improving domestic economic conditions helped to boost demand, but some construction companies reported delayed spending decisions ahead of the Autumn Budget.”

Brian Smith, head of cost management at AECOM, said: “The construction industry has enjoyed a healthy period of output growth since early spring and October’s increase is another clear indicator of a revived industry that believes it is moving to firmer ground.

“As we enter the winter trading period, the sector will be encouraged by the chancellor’s announcement to invest more than £100bn in critical infrastructure across the public estate – driving long-term growth and economic stability.

“To achieve this, the private sector will need to play a central role in ensuring these complex programmes get off the ground and deliver the vital services across healthcare, education and transport.

“With demand set to strengthen as 2025 approaches, the outlook is certainly brighter and a much-needed period of economic stability will stimulate a recovery in private sector investment.”