Construction sector hits third record low

3 August 2008
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04 August 2008 | Jake Kanter

Activity in construction continued to deteriorate, as it hit its third successive record low since records began in April 1997.

According to the latest CIPS/Markit Purchasing Managers' Index for construction, where a figure below 50 represents contraction, activity in the sector recorded 36.7 in July. It marks the third consecutive low, after the industry registered 38.8 in June and 43.9 in May.

Housing activity plummeted to a "severe" low of 18.7, compared with 25.6 the month before. The credit crunch is still damaging the market. Commercial activity also continued on a downward spiral, contracting to 38.2, down from 41.1 in June.

Having fallen to a record low of 40 in June, civil engineering recovered a little to register 46.5. This was still well below the 12-month average of 57.4.

There was a continued reduction in new orders, which recorded 41 in July, compared with 43.5 the month before. Staff levels registered 45.6, contracting faster than ever before from June's figure of 47.8. A lack of new business and increasing pessimism means workers are being laid off.

Input prices softened a little, falling from June's record high of 81.1 to reach 79. The cost of concrete, steel and timber was still severely inflated.

* Further coverage of PMI reports is available at http://www.supplymanagement.com/pmi



SMaug2008

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