Shakier building sector points to a new round of money-printing

Britain's building sector shrank at its fastest pace in three years in June, adding to fears the economy is heading deeper into recession and increasing the likelihood the Bank of England will restart money-printing later this week. The Markit/CIPS Purchasing Managers' Index, the monthly survey of construction firms, plummeted to 48.2 in the month, down from 54.4 in May, with any figure below 50 indicating a contraction in activity.

Some of the survey respondents said the extra bank holiday in June had artificially depressed activity, but most also pointed to thin order books.

"Temporary factors should not be overplayed, as the latest figures reveal worsening underlying business conditions within the sector," said Tim Moore of Markit.

Civic engineering and housebuilding were especially hard hit. Employment in the sector, which makes up 7 per cent of the economy, also fell as construction projects came to an end. Firms' assessments of future output fell to their lowest in eight months.