Construction sector 'sick man' of UK economy

1 September 2009

02 September 2009 | Jake Kanter

Activity in the UK construction sector showed a subtle improvement last month, but remained in decline.

According to the latest CIPS/Markit Construction Purchasing Managers' Index - where a figure below 50 represents contraction - total activity in the sector registered 47.7 in August. The decrease was marginally less severe than the month before, when total activity recorded 47.

Housing activity showed the biggest improvement, as the rate of decline eased from 44.2 in July to reach 48.2 last month.

Contraction in commercial activity also eased, but civil engineering slipped back into a faster rate of decline last month after registering some improvement in July.

Staff levels continued to decline in August, while the number of new orders decreased at a faster rate than the month before. Input prices also remained in contraction. CIPS chief executive David Noble described the construction industry as the "sick man" of the UK economy. "Far from seeing signs of a return to growth, the sector remains stuck in an unprecedented 18-month period of contraction," he said.

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