The UK construction sector activity fell marginally in September to 58.9 from 59.1 in August, where economists had expected a rise to 59.2.Well above the 50 mark, construction activity saw healthy growth across all three sub-sectors last month. with the residential sector seeing the sharpest rise in nearly a decade, in spite of recent concerns of a new housing market bubble.
Industry confidence rose to the highest level since in 2 years in September, with 51% of survey respondents expecting a rise in output over the next year and only 9% predicting a fall. Employment also grew for the fourth consecutive month.
There a two things the government will have to keep a close eye on going forward -
- House prices, as mortgage lender Nationwide said house prices rose for the fifth straight month in September and hit record highs in London; and
- Employment rates, with The Bank of England only willing consider raising interest rates when overall unemployment rate falls to 7%.