Confidence within the construction sector dropped to its lowest level for nearly four years following steep falls in new work and continued job cuts, a survey has found.
The Markit/Chartered Institute of Purchasing and Supply managers index for November found construction executives’ confidence for the year ahead was at its worst since the near-record lows of December 2008.
Many of the 170 construction firms surveyed feared that there was not enough new work to replace completed projects.
The survey found new work fell at its steepest rate since April 2009 and new order volumes have been depressed for six months. The largest rise in civil engineering work for seven months was not enough to offset the sharpest fall in commercial construction since December 2009 and six consecutive months of contraction in residential building.
Consequently employment in the industry reduced at its fastest rate since December 2010.
However construction costs continued a 34 month-long rise driven by increases in fuel and energy prices.
Senior economist at Markit Tim Moore, author of the report,said: “A protracted decline in workloads, the double-dip UK recession and shrinking investment spending has made 2012 a year to forget for the construction sector. November’s PMI survey suggests that construction output has yet to hit rock bottom.
“This was highlighted by new work dropping at the fastest pace for around three-and-a-half years, while signs of a greater squeeze on client’s budgets for 2013 brought confidence to its weakest since the record lows of late-2008.
“Adding to the signs that construction firms are fearing a prolonged period of depressed demand, employment fell again in November, and at the steepest pace for almost two years.”
David Noble, chief executive officer at the Chartered Institute of Purchasing & Supply, said: “Parallels to darker days of the economic crisis can be seen in the construction sector, which is under pressure from all sides.
“Businesses are now set for a bitter end to 2012 with little hope of respite in theNew Year. Jobs have been slashed in response to the fastest fall in new orders for over three-and-a half years, confirming the sector’s return to contraction and the lowest levels of confidence seen since the height of the economic crisis in 2008.”