Activity growth in the British construction sector slowed more than expected in October to its weakest level for eight months, a survey of purchasing managers showed today.

The Markit/Chartered Institute of Purchasing and Supply construction PMI fell to 51.6 in October from 53.8 in September, against expectations for a more modest easing to 53.0.

The survey suggests that construction will not make as strong a contribution to growth in the last three months of this year as it did earlier in the year.

A breakdown of the data showed activity in the housing and civil engineering sectors fell in October, although commercial construction increased markedly.

"Looking ahead therefore, it may be reasonable to assume that construction will have less of a positive impact on GDP compared to Q3," said Markit economist Sarah Ledger.

New orders continued to rise, albeit at its slowest pace in eight months, and firms remained optimistic about business over the coming year.

"Nonetheless, confidence remained weak in the context of historical data, as panellists were cautious over the potential impact on activity that will arise from cuts in government spending," the survey said.

Reuters