UK construction output to rise

The path of construction output is very difficult to predict because the official data appear totally at odds with what the surveys tell us. The data say that output fell by 5.5% between March and August whereas the construction PMI has been no lower than 54.2 in that period and the highest reading was 58.1. Anything above 50 indicates expansion. 

Fortunately, for the September data we have some help from the ONS. The preliminary estimate of Q3 GDP includes a guesstimate for September construction output of 1.3% mom. Although the data are volatile and prone to revision they do give us a good guide in the short term. 

"We predict an increase of 1.5% mom but with a warning that the forecast margin of error is immense", says Societe Generale.