Construction sector undergoing contraction

Published:  05 April, 2013

The latest Markit/CIPS purchasing managers index (PMI) recorded a reading of 47.2 last month for construction output – below the 50 mark which separates contraction from expansion.

Snow and flagging demand hit activity in the sector, heightening fears the UK is heading for a triple-dip recession. While March construction output was an improvement on February's 40-month low of 46.8, it remains much weaker than the average reading of 54.

IHS Global Insight economist Howard Archer said: "It seems highly probable that the (construction) sector suffered renewed and appreciable contraction in the first quarter of 2013 after all too rare expansion in the fourth quarter of 2012."

Civil engineering was the worst-performing area of construction in March – recording the fastest fall since October 2009 – while commercial building work fell for the seventh time in eight months.

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