LONDON (Reuters) - British construction companies saw activity pick up again in October but the gain masked a first fall in new orders since May 2020 as customers cut back on spending, a survey showed on Friday.
The S&P Global/CIPS construction Purchasing Managers' Index rose to a five-month high of 53.2 from 52.3 in September, having fallen below the 50.0 mark in the previous two months.
Economists polled by Reuters had forecast a weaker reading in October of 50.5. Any reading above 50 indicates growth.
Tim Moore, economics director at S&P Global Market Intelligence, said commercial work was the best-performing area as delayed projects moved forward. House building also provided a positive contribution to overall workloads.
"However, the forward-looking survey indicators highlight that growth will be harder to achieve in the coming months," Moore said, citing rising borrowing costs, economic uncertainty and cost constraints which weighed on order books in October.
Business optimism slumped and was by far the weakest since early in the coronavirus pandemic as clients cut back on non-essential spending.
On a more positive note, growth linked to green energy projects and planned infrastructure spending could help to offset the gloomy British economic outlook, Moore said.
The all-sector PMI, including the services and manufacturing sectors released earlier this week, fell to 48.7 in October, its lowest since January 2021, from 49.4 in September.
(Reporting by William Schomberg; Editing by Susan Fenton)