Mubasher: The UK construction sector activity saw a sustained expansion during October, with growth improving slightly from September, a survey showed on Friday.

The UK construction purchasing managers' index (PMI) rose to 53.2 in October compared to 52.1 in the previous month, marking the second strongest level in 16 months, IHS Markit and Chartered Institute of Procurement & Supply (CIPS) said.

However, it remained well below the long-run survey average of 54.3.

“Although total UK construction activity rose at a stronger pace in October, the underlying survey data paint a less rosy picture for the sector towards the end of the year,” IHS Markit’s economics director Trevor Balchin commented.

Higher construction activity was ascribed to the commencement of new contracts, overseas work and a broad-based increase in business.

Civil engineering was the key driving for the total growth uptick in October, rising at the strongest pace since July 2017.

House and commercial construction both saw a growth at solid rates in the month, despite the increases came at the weakest pace in seven and five months, respectively.

New orders across the UK construction sector rose at the weakest pace of the current five-month sequence of expansion. Firms cited intense competition in the market, and delayed final decisions from clients.

Moreover, slower rise in new business volumes affected firms’ expectations for future expansion, with the outlook gauge falling to around six-year low, as they highlighted uncertainty over the Brexit and the undermined business confidence.

Cost pressures remained in the construction sectors, despite the input costs retreated to a 27-month low. Firms mentioned rising fuel, labour, timber and steel costs.

By 9:56 am GMT, the GBP/USD pair rose 0.12% to $1.3027, while the EUR/GBP pair edged up 0.11% to GBP 0.8782.