U.K. Construction Pickup Overshadowed by Soaring Cost Pressures
(Bloomberg) -- Construction activity in the U.K. grew at the fastest pace in eight months in November, but companies warned that rising costs are squeezing their profit margins.
Housing, commercial and civil engineering improved and it marked the first time since May that all three sectors posted readings of at least 50, the dividing line between growth and contraction.
IHS Markit said its headline construction index rose to 52.8 from 52.6 in October. That’s the highest since March, though it’s still below the average of the past two years.
Some companies said workloads were boosted by a resumption of projects delayed after the Brexit vote. However, Markit noted a squeeze on margins from a “steep and accelerated rise” in costs resulting from a weaker pound. It also highlighted pressure on confidence from “lingering economic uncertainty.”
Markit’s manufacturing index slipped to a four-month low of 53.4 in November, it said on Thursday. A gauge of services, the largest part of the economy, will be published on Monday. It rose in October to the highest since January.