Autumn Statement 2016: House building
October was the first time in four months the construction sector had reported signs of expansion Neil Hall/ Reuters

Britain's construction sector suffered an unexpected slowdown in October, but the annual performance was better than expected, data released on Friday (9 December) by the Office for National Statistics (ONS) showed.

Output in the construction sector fell 0.6%month-on-month in October, compared with analysts' expectations for a 0.2% gain, while the 0.3% advance recorded in the previous month was revised up to show a 0.9% gain.

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All new work decreased by 0.9%, with the largest downward contribution coming from infrastructure, while all repair and maintenance showed no growth, the ONS said.

That came after figures released in November showed Britain's construction industry recorded its worst performance in four years in the first three months of 2016.

Meanwhile, on a year-on-year basis, the construction sector saw output climb 0.7%, compared with analysts' forecast for a 0.1% drop, while the previous month increase was revised upward to show a 2.5% gain.

New orders in the the third quarter were 2.4% lower than in the previous three-month period, when the level of new orders was the highest since the corresponding quarter in 2009 at £13.4bn.

Data released last week by Markit/CIPS UK showed the construction sector fared better than expected in November, buoyed by a strong performance in residential projects, but the rate of inflation was the steepest on record in five years.

The closely-watched Construction Purchasing Managers' Index stood at 52.8 last month, compared with analysts' expectations for a 52.2 figure and with the 52.6 reading recorded inOctober, when the index touched the highest level since March.

However, average cost burdens rose sharply, with the rate of inflation the steepest since April 2011.

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