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Overall, constraints on activity levels saw no change between August and September, but those citing insufficient demand as a reason fell by 4%, and those citing labour shortages rose by 3%.

Growth in the UK's construction industry is expected to slow over the next three months according to CFR's Leading Construction Activity Indicator. The indicator, which provides a short-term forecast of activity levels in the construction industry, is likely to slip from 55 in October to 53 by January, suggesting a slight slowdown in the rate of growth.

The northern regions are forecast to display the strongest growth in construction activity over the coming years, with activity levels good across all sectors. In 2003, growth of 13% is expected, slowing to 10% in 2004 and 7% in 2005. The central regions are also forecast a robust future, with growth of 9% estimated for 2003, 7% in 2004 and 5% in 2005.

Growth in the southern regions is expected to pick up over the forecast period, following a drastic drop to 1% this year from 13% in 2002. With a recovery in commercial construction anticipated, we forecast growth to pick up in 2004 and 2005 to 3% and 7% respectively.