Rate of decline in construction sector slows

1 September 2008
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02 September 2008 | Jake Kanter

Activity in the UK construction sector continued to decline last month, although it recovered slightly from its record low in July.

According to the latest CIPS/Markit Purchasing Managers' Index for construction, where a figure below 50 represents contraction, activity in the sector registered 40.5 in August. In July the figure was 36.7.

Housing activity improved from its "severe" low of 18.7 in July to reach 27.2 last month, still well below the 50 mark. Activity in the commercial sector also fell to 40.3, a slight improvement compared with 38.2 the month before.

Although civil engineering has not been as badly affected as the other sub-sectors by the economic downturn it continued to contract, recording 48.2. This was slower than July's fall to 46.5.

New orders also recorded a fall to 42.6 in August, compared with 41 the month before. A fall in the value of tenders created greater competition for work between firms.

Input prices, including the cost of raw materials and fuels, continued to rise, reaching 78.5 in August. However, this increase was smaller than the 78.9 recorded in July.

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

SMsep2008

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