According to the Chartered Institute of Purchasing and Supply’s latest market index, deteriorating conditions in the housing sector, ongoing tight credit availability, sharply rising input costs and a wider economic slowdown continued to hurt overall operating conditions in the UK during July.
The data revealed a sharp decline in total output, principally led by the severe contraction in housing activity.
It also found with workloads lower and cost pressures intense, jobs in the sector were shed at the fastest rate in the survey’s 11-year history.
CIPS director of professional practice Roy Ayliffe described the housing sector as “the sick man of the industry”.
He said: “Levels of housing activity plunged to a record low. That said, poor performance in the commercial and civil engineering sectors couldn't provide any cause for celebration.
“July marked an end to constructors’ optimism about recovery, as spirits were knocked by the persistent and rapid decline in new business and activity. More jobs were shed – and at a faster pace than in June – as pessimism about the sector’s future took hold."
The Purchasing Managers’ Index – aan indicator designed to measure the overall trends in construction sector output – maintained its downward trend, reaching a new series low of 36.7. A level of 50 indicates no change.
Posting a reading of 18.7 in July, the Housing Activity Index also plunged to a series low and marked eight successive months of contraction.
Markit Economics senior economist Paul Smith said: “It is perhaps the severity of the slowdown that is most startling – just under a year ago growth was at its highest for nine-and-a-half years – and the data goes someway to highlighting the sector’s greater exposure to the unfavourable changes in the financial climate and the deteriorating housing market.”