Fears that Britain is heading for a triple-dip recession has heightened after the latest snapshot of the construction industry revealed a deterioration in business conditions.
The monthly survey from Cips/Markit showed that the closely watched Purchasing Managers’ Index dropped from 50.9 to 49.3 last month – below the 50 level that separates a sector that is expanding from one that is contracting. City analysts had expected a reading of 50.5. The PMI summarises the opinions of purchasing managers in the sector, who gauge future demand and adjust orders for materials accordingly.
Economists said the data puts pressure on the chancellor George Osborne to announce measures to stimulate the construction sector when he presents his autumn statement to the Commons on Wednesday. Howard Archer of IHS Global Insight said: “The survey intensifies the case for strong government initiatives to try and lift infrastructure activity and housebuilding. There is significant pressure on the chancellor to find more money and support for infrastructure investment and projects in his autumn statement.”
New orders fell for the sixth month running, prompting construction companies to lay off workers at the fastest rate since December 2010. Building of homes and commercial properties continued to decline, but civil engineering increased.