More woe for beleaguered UK construction sector

A "disastrous" month for Britain's building industry raised fresh fears over UK recovery hopes yesterday as business leaders warned of stagnant growth and house prices fell again.

The latest alarming figures from the Chartered Institute of Purchasing & Supply (Cips) showed the nation's construction industry still stuck in recession during September. Housebuilders endured their worst month since a snow-blighted December 2010, while commercial building work saw its biggest slump for more than two years.

The worrying snapshot of the beleaguered sector's fortunes offers little hope that the industry will contribute to the economy's recovery after accounting for half of the UK's 0.4 per cent decline between April and June.

Cips' chief executive, David Noble, said: "September's figures show the construction sector's cupboard to be well and truly bare, rounding off a disastrous quarter. After the longest continual decline in new orders for three years, this is of no surprise.

"Looking ahead, there is little to be positive about. Homebuilding continues to be hit hard, and the commercial sector, so long the star of the industry, has lost its sparkle."

The latest figures follow another poor showing for manufacturers in September, and calls from the British Chambers of Commerce for David Cameron to do more to spur on the economy. The Bank of England is also expected to pump billions more into the economy via quantitative easing next month, although lending figures have showed little early impact of its £80bn Funding for Lending scheme in August.

The BCC's latest quarterly survey of more than 7,500 firms across the UK showed a flat domestic market and weakening export demand, as well as worsening confidence and investment levels among manufacturing and services firms.

House prices added to the gloom in September after a surprise 0.4 per cent fall, according to the building society Nationwide.