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Construction orders continue to fall

According to the latest report from the CIPS/Markit index the fall in construction purchasing accelerated in October.

The index fell to 46.2 last month, down from 46.7 in September. The index is based on a survey of purchasing managers asked whether orders had increased or decreased in the month; any figure below 50 represents a decline in orders.

Each of the past 20 months has shown a decline in purchasing activity.

However, residential construction grew for the second month in a row, although this was not reflected in the commercial or civil engineering sectors, which both contracted further. The decline in civil engineering activity was the fastest recorded in seven months. Jobs were also cut at their sharpest rate in four months in October.

David Noble, CIPS’ chief executive, said: “The fact that the sector took another turn for the worse this month just highlights how fragile it still is. Further drops in commercial and civil engineering activity were the key drivers behind the bad news. A stabilisation in order books did little to support activity, while weak sterling and higher fuel prices added to constructors’ difficulties.

“Perhaps of most concern is the continued slashing of jobs at construction firms. The pace of job cuts actually accelerated in October as the current state of the sector means that many who have lost jobs will struggle to find something else before Christmas.”

However, optimism about future business prospects remained high as industry members expect stabilising economic conditions to boost demand.

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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