UK construction shows surprise acceleration in September - PMI

LONDON (Reuters) - Britain's construction industry unexpectedly picked up speed in September, helped by a post-lockdown bounce in the housing market, a survey showed on Tuesday.

The IHS Markit/CIPS UK Construction Purchasing Managers' Index accelerated to 56.8 from 54.6 in August, above all forecasts in a Reuters poll of economists which had pointed to a slight slowing.

"Following August's slowdown, growth in UK construction activity rebounded strongly in September," Eliot Kerr, an economist at IHS Markit, said.

"Forward-looking indicators point to a sustained rise in activity, with new work increasing at the quickest pace since before the lockdown and sentiment towards the 12-month outlook at its strongest for seven months."

Construction firms continued to cut jobs, although at a significantly slower rate than in August.

Increases in activity in home-building - which reported the fourth sharp monthly increase in a row - and in commercial construction more than offset a fall in civil engineering work.

Britain's housing market has boomed since coronavirus restrictions were lifted in May, driven by a tax cut, pent-up demand from earlier in the year and demand for more spacious homes after the lockdown.

Some industry officials have warned that the housing market recovery is likely to run out of steam with unemployment likely to rise as the government pares back its job support programmes.

The all-sector PMI - a combination of the construction, services and manufacturing surveys - fell back to 56.6 from August's six-year high of 58.7, reflecting slower growth in Britain's dominant services industry.

(Reporting by William Schomberg; Editing by Catherine Evans)