UK construction activity in record Nov fall
Decline in PMI level is the sharpest on recorded for almost four years
By CFOWorld.co.uk staff | CFO UK | Published 15:45, 04 December 12
The UK's Markit/CIPS Construction Purchasing Managers' Index (PMI) fell to 49.3 in November from a 50.9 level recorded in October; the sharpest decline on record since April 2009.
A level below 50 is indicative of a contraction. The latest figure, published on Tuesday, was the lowest since August and the third contraction to a record low in four months.
Markit's senior economist Tim Moore said the construction sector continued to struggle in the face of evaporating market confidence.
"November's PMI survey suggests that construction output has yet to hit rock bottom. A protracted decline in workloads, the double-dip UK recession and shrinking investment spending has made 2012 a year to forget for the construction sector," Moore added.
The extended weakness of construction output was highlighted by the fact that it contracted by 2.6 percent quarter-over-quarter in the third quarter, which was a third successive decline after drops of 2.9 percent quarter-over-quarter in the second quarter and 6.1 percent quarter-over-quarter in the first quarter.
Construction output was also down by 10.9 percent on an annualised basis in the third quarter.
Howard Archer, chief UK economist at IHS Global Insight, said the third-quarter decline in construction output was a particularly poor performance given that it should have benefited from the making up of some of the activity lost in the second quarter to the extra day public holiday and very wet weather.
"With the construction sector seemingly headed for further contraction and with the manufacturing sector still struggling despite showing some signs of limited improvement in November, the economy is going to be reliant on clear expansion in the dominant services sector if it is to avoid a renewed GDP dip in the fourth quarter after the third quarter rebound," he added.
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