Mixed picture for UK growth as construction sector slumps

The UK economy failed to reach top gear in October, as the manufacturing sector expanded but the construction industry continued to slump.

Figures from the Office for National Statistics (ONS) showed construction output unexpectedly fell by 1.7% on the month, as the industry was dragged down by a 1.5% decline in new work.

The picture was also bleak for the three-month period to October, with output dropping by 1.4% following a 3% slide in repair and maintenance work.

However, contracts linked to the £56 billion HS2 rail line ensured new orders leapt by 37% between July and September, brightening the outlook for the beleaguered sector.

In a contrast of fortunes, Britain's buoyant manufacturing industry delivered another robust performance in October, expanding by 0.1% as the wider industrial production came in flat.

Separate figures on the UK imports and exports showed the total trade deficit widened by £300 million to £1.4 billion between September and October as goods imports jumped 1.6%.

The pound showed little movement following the announcement, with sterling marginally lower against the US dollar at 1.34 and 0.3% higher versus the euro at 1.14.

ONS statistician Kate Davies said: "While manufacturing was relatively subdued overall in October despite record production of cars destined for export, the longer-term picture is one of strong growth.

"However, despite the stronger performance of UK manufacturers, imports grew more than exports in the three months to October once erratic items were excluded, slightly widening the underlying trade deficit.

"Construction output continued to fall back from its peak at the start of the year, with both new building and repair work faltering once again.

"However, construction orders for future work received a huge boost in the third quarter as many large HS2 contracts were awarded."