The headline seasonally adjusted UK Construction PMI Total Activity Index fell to 52.6 in September, down from 55.2 in August. The most recent reading indicated a slight increase in total construction output, the slowest rate of recovery in eight months. The slowdown is due to a mix of supply chain issues and lower demand.

All three broad categories of construction activity slowed, with civil engineering seeing the most significant drop (51.0, down from 54.8 in August).

House construction slowed, with the most recent expansion being the slowest since the recovery began in June 2020 (52.8). As a result, the commercial segment (53.6) had the strongest performance. The ongoing boost to order books from the reopening of the UK economy demonstrated the sub sector's resilience.

Construction companies reported a slight rise in new work, with the rate of growth falling considerably. Client hesitancy and less favourable demand conditions were blamed for the downturn.

Greater workloads and stretched corporate capacity drove another high increase in employee numbers in the construction sector. The most recent increase in staffing levels, however, was the smallest since April, reflecting significant wait periods to fill vacancies.

The shortage of labour was attributed to lack of subcontractor availability. Shortages of subcontractors added to the cost pressures, with rates charged for subcontracted work growing at an all-time high.

Although the rate of inflation dropped further from June's all-time high, purchase prices rose fast. Around 78% of companies' costs had increased as a result of supply shortages and transportation surcharges.

Meanwhile, construction companies remain optimistic about the future. Only 8% expect a decrease in output, while 51% expect it to rise. However, confidence was lower than in August, owing to fears that the supply chain issue will stifle growth.