Decline in construction industry accelerates in June

Activity in the construction sector experienced a further, more accelerated decline in June, a recent study has shown.

The Chartered Institute of Purchasing and Supply (CIPS) revealed that their construction PMI index dropped to 44.5, compared to 45.9 in May. Anything below 50 indicates that the construction industry is experiencing a contraction.

The survey showed that house building and commercial construction, in particular, saw rising declines. It also revealed that, while the quality of services provided by construction firms improved for the month, jobs continued to be heavily lost during June.

David Noble, Chief Executive Officer at CIPS, has described the UK construction sector as balancing on a ‘knife edge'. Given that the construction industry had previously seen improvements in April and May, he also reiterated fears that the country could yet see a ‘w-shaped recession'.

However, in spite of the findings, Noble said some ground has been made since the start of 2009 for the construction industry. He commented:

"The sector is in better shape than at the start of the year. Moreover, though purchasing managers say current contracts are drying up and the new business horizon looks sparse, they are still resolute that wider economic recovery will materialise over the coming twelve months."

03/07/09