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CIPS figures show construction firmly in recession

The UK construction economy remained firmly mired in recessionary territory in March according to the latest CIPS/Market purchasing managers index.

The index, which indicates overall business activity, rose slightly to 30.9 in March from February’s series low of 27.8.

But with anything below a score of 50 indicating a decline in activity, the score represents steep falls in building activity being reported by purchasing managers.

Sector data showed that the housing industry suffered the most marked contraction in output.

UK constructors reported a substantial decrease in new business placed with them since February.

Respondents noted sharp reductions in client budgets, strong competition to secure new contracts, fewer customer enquiries and opportunities to tender, as well as a lower success rate on submitted bids.

Although still very subdued by historical standards, sentiment amongst UK construction firms remained positive in March.

Reasons for optimism included current contract negotiations, business investments and marketing activities.

However, many companies simply believed that conditions cannot continue to deteriorate.

Chartered Institute of Purchasing and Supply director Roy Ayliffe said: “Unremitting global forces continued to batter the UK construction sector in March.

“Purchasing managers reported further falls in overall construction activity with housing, once again, fairing the worst.

“Inevitably, extremely weak demand led to a significant loss of construction jobs.”