We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
RSS FeedChange Management

Construction falls to lowest level since Dec 2009


The PMI index sank to 48.2 from 54.4 in May, its lowest reading in two and a half years

Article comments

Construction activity shrank at its fastest pace in June since December 2009, new data showed on Tuesday, adding greater pressure on the government to boost growth.

Underlying business conditions worsened and an extra public holiday hit output, the Markit/CIPS construction purchasing managers' index (PMI) showed.

The data will make grim reading for the government and Bank of England who are facing increasing calls to act on the economy that slipped into its second recession in four years.

The PMI index sank to 48.2 from 54.4 in May, its lowest reading in two and a half years and falling below the 50 level which separates growth from contraction. It missed forecasts for a more modest fall to 53.0.

"The UK construction sector moved back into reverse gear in June with output falling at its fastest pace since the end of 2009," said Tim Moore, senior economist at data compiler Markit.

The data comes the day after figures showed the manufacturing sector contracted for the second consecutive month in June and ahead of a Wednesday release that is expected to show only tepid growth in the dominant service sector.

With economists seeing marginal growth ahead at best, and only a mild improvement next quarter from London's hosting of the Olympic Games, the Bank of England is widely seen restarting its quantitative easing asset purchase programme.

The Bank is expected to top up the £325 billion of cash it has already pumped into markets with another £50 billion when it meets on Thursday as falling inflation gives it more scope to support the battered economy.

Cost pressures eased markedly, Markit said, giving the central bank more room to manoeuvre as increased costs for energy and raw materials were offset by lower fuel prices.

Markit said respondents cited uncertainties about the economic outlook, as well as disruptions from the extra holiday to celebrate the Queen's Diamond Jubilee and severe weather across large parts of the country, as reasons for the decline in activity.

Share:

Comments

Construction falls to lowest level since Dec 2009
Change Management

How M&A teams can create value by challenging the CEO

How M&A teams can create value by challenging the CEO

A typical “hold” period of nine to 18 months can generate increased sale valuemore ..


European IPO markets reaches pre-recession levels

At least 15 IPOs with over €250m proceeds are planned before the end of the summer, PwC saysmore ..

BG Group relocates trading HQ to Singapore

Oil and gas company says it wants to get closer to “high growth” LNG marketsmore ..

Chicago Sun-Times first major US paper to accept bitcoins

Backed by Coinbase, the move is part of a digital-first strategymore ..

Will the new tax breaks help Britain’s VFX and film industries?

Alex Hope, MD of Double Negative, explains what the autumn statement really means for UK VFXmore ..

How to improve your annual report

Regulators recognise the value of storytellingmore ..

Send to a friend

Email this article to a friend or colleague:


PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.



In Depth
Do you have what it takes to become a non-executive?

Do you have what it takes to become a non-executive?

The benefits of board service for CFOs more ..

In Depth
How M&A teams can create value by challenging the CEO

How M&A teams can create value by challenging the CEO

A typical “hold” period of nine to 18 months can generate increased sale value more ..

Advertisement

* *