UK building still in recession

Published:  03 November, 2009

LONDON: The UK construction sector remained in recession during October according to data released today by the Construction Purchasing Managers' Index.

The index posted a 46.2 reading in October, signalling a further fall in UK construction sector activity, and at a faster pace than that seen in September.

Construction activity declined in each of the past twenty months according to the survey. Input costs rose adding to the difficulties facing UK construction companies, it said.

The survey showed growth in residential construction for a second successive month but recorded further contractions in commercial and civil engineering activity.

Sarah Ledger, economist at Markit said: ""Encouragingly, data for the residential construction sub-sector signalled improved activity levels for the second consecutive month, and overall new orders volumes received by UK construction companies were reported to have stabilised.

Latest data showed that new business levels remained unchanged since September, ending a nineteen-month period of decline. While some panellists reported that tenders for business were proving successful, these were offset by other comments of financial constraints at clients.

David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: "These continue to be worrying times for the UK construction sector as firms continue to struggle in the face of difficult market and economic conditions. The fact that the sector took another turn for the worse this month just highlights how fragile it still is.

"Further drops in commercial and civil engineering activity were the key drivers behind the bad news. A stabilisation in order books did little to support activity, while weak sterling and higher fuel prices added to constructors' difficulties," Noble said.

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