Continued contraction in UK construction sector

According to the latest CIPS-Market survey the UK construction sector continued to contract for a second month in row in October. The index posted a reading of 46.2 in October, indicating a further fall in UK construction sector activity, and at a faster pace than that in September.

Residential construction indicated growth but further contractions were recorded in commercial or civil engineering sub-sectors.New business levels were unchanged since September, ending a 19-month period of decline.

The index also shows that job losses were substantial and accelerated since September, as redundancy programmes continued to be implemented, while the demand for sub-contractors reduced markedly in October.

David Noble, chief executive at the Chartered Institute of Purchasing & Supply, says: “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...The only light at the end of the tunnel was optimism over future business prospects as purchasing managers said they expect workflow to rise due to improving economic conditions and marketing initiatives.”