Builders suffer another month of contraction

 
Ben Southwood
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THE CONSTRUCTION industry was unable to pull itself out of its torpor in September, according to data released yesterday, which showed another gloomy month of decline.

The headline purchasing managers' index (PMI) – based on a business survey – edged up 0.5 to 49.5, but this was still below 50, thus indicating continued contraction.

In fact, this month marks the first time the industry has been declining for two months in a row, according to the PMI, prepared jointly by Markit and the Chartered Institute of Purchasing and Supply (CIPS). Comparison with the series average of 54.2 only emphasises the weakness in the sector.

Markit’s Tim Moore said: “UK construction PMI data for September presents another bleak assessment of business conditions in the sector.

“The current stretch of falling new orders is now the longest seen for three years, reflecting shrinking underlying demand alongside delays in spending from both public and private sector sources,” Moore added.

The data will not give any hope to chancellor George Osborne, whose fiscal plans are hinged on a recovering economy.

“Looking ahead, there is little to be positive about,” said CIPS boss David Noble. “Homebuilding continues to be hit hard [and] the commercial sector...has lost its sparkle.” Noble’s comments refer to the rapid rate of decline in commercial construction activity – the fastest pace for over two and a half years.