Builders see toughest time ever
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With savings and pension funds depleted by the recent economic turmoil, pensioners are looking for other ways to supplement their pension and many are using their house as a way of generating cash. More...
UK construction hits record low
Tuesday, 02 Dec 2008 11:00
New orders, building levels and employment all fell for the construction industry in November.
CIPS/Markit UK construction purchasing managers index (PMI) dropped to a record low of 31.8 points as property crisis and recession hit the industry.
The research showed a "steep fall" in new business as demand dries up.
As a result the level of employment in construction also fell.
Despite the fall in output, firms still remain positive – as the Bank of England's 1.5 per cent interest rate cut last month boosted confidence.
A fall in input prices as international commodity prices for the first time in nearly a decade also created some hope for builders
Gemma Wallace, economist at Markit, said: "Further series-record falls in total activity, new orders, employment, sub-contractor usage and purchases painted a distinctly gloomy picture of the prevailing conditions in the UK construction economy during November.
"However, with weak global demand exerting downward pressure on input prices and the threat of inflation gone, the Bank of England’s drastic interest rate cut fostered a modest degree of optimism in the sector."
She added: "Nevertheless, there is still a fair way to go before confidence regarding future activity is fully restored to the long-run trend – especially in light of the dismal conditions that constructors are currently facing."
Simon Rubinsohn, cheif economist at the Royal Institution of Chartered Surveyors (Rics), said housebuilding and commercial development had virtually ground to a halt and even infrastructure projects appear to be feeling the pain.
"Public sector projects should provide some offset to this bleak picture with the government announcing in the pre-Budget report an acceleration in capital spending to the tune of £3 billion for the coming year," he said.
"Even so, the value of construction output is likely to fall in 2009 with unemployment rising sharply in all trades. Following on from yesterday's disastrous CIPS survey of the manufacturing sector, the pressure is for the MPC to cut interest rates further when it meets later this week."