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Construction growth at 16-month low

October’s PMI surveys point to a severe slowing in UK economic growth at the start of the fourth quarter.

The pace of expansion is down to its lowest for almost 16 months.

Commenting on the figures, PricewaterhousCooper UK engineering & construction leader Chris Temple said: “Given that the economy, particularly in Europe, is showing some signs of weakness and residential house prices are now beyond their pre-recession peak, it is not surprising that we are seeing a slight slowing in the market.

“Some large infrastructure projects have recently ended so there is a slight lull in that part of the sector, but house builders have a healthy pipeline and are building at healthy rates.”

Mr Temple said contractors and subcontractors have been taking on work at relatively low margins and the recent increase in labour costs and of some raw materials meant these margins were being squeezed.

He added: “Overall the picture for the construction sector is healthy and this slight easing of the growth rates is nothing to worry about - the sector is just catching its breath.”

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