THE construction sector showed signs of growth last month, but new work and employment shrank and firms remained cautious about future business, a survey showed.
The closely watched Markit/CIPS Construction Purchasing Managers' Index (PMI) rose to 50.9 from 49.5 in September, just above the 50 line that separates growth from contraction. That is the highest reading since July and better than the forecast 49.1.
However, new orders fell for the fifth straight month - the longest period of decline since the 2008-2009 recession - and firms reduced headcount at the fastest pace since August 2011.
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"The bigger picture remains bleak," said Tim Moore, senior economist at Markit, which compiles the survey.
"The year-ahead business outlook was still relatively subdued during October, as survey respondents cited weak spending patterns and squeezed budgets among clients," he added.
Input price inflation sped up in October compared to September, mostly driven by higher fuel and energy costs.
Within the sector, only civil engineering output rose, with residential and commercial work declining, Markit said.
The news came as it emerged that building materials supplier Hanson will cut 250 jobs under a restructure that will see at least 15 plants and quarries closed, including its customer service centre in Wetherby in West Yorkshire, with others merged and mothballed. Some management roles are at risk the North-East. The firm employs about 4,000 people at nearly 300 UK sites.
And hundreds of jobs are under threat at building materials firm Tarmac because of asset stripping, a leading union said.
The GMB said 500 posts could be axed at the Wolverhampton-based firm under a planned joint venture with French company Lafarge.
Allan Black, GMB national officer, said:"This is the direct consequence of the coming together of Tarmac and Lefarge. Although change is inevitable, the potential loss of 500 jobs in Wolverhampton is an unacceptable by-product.
"We ask Tarmac and Lefarge to reconsider this decision which looks to be driven by asset stripping rather than any other grounds."
Terry Last, chief executive of Tarmac, said: "We are currently consulting with employees on how the Tarmac/Lafarge joint venture will be structured once the regulatory process is complete.
"It would be inappropriate to comment publicly while these conversations with employees are still on-going."