Building industry still struggling, survey shows

The construction sector continued to decline in September, a survey showed today, as residential building saw its biggest fall in nearly two years.

The Markit/CIPS survey recorded a reading of 49.5 in September, which is an improvement on the previous month's reading of 49 but still represents a decline in output as it falls below the no-change 50 mark.

Residential building was the worst performing category, continuing the trend seen throughout most of 2012, registering the worst drop since December 2010.

Commercial building also dropped at its fastest rate for just over two and a half years, although a return to civil engineering growth helped soften the overall downturn.

Economists said the figures knocked confidence that the nation's builders would eke out growth in the third quarter after dragging on the wider economy for a several months running.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "The construction sector continues to be hampered by major headwinds, notably including public spending cuts, a weak economy, a struggling housing sector, and problems in getting funding for large-scale projects."

PA