Blow for Osborne as construction contracts

Grant Prior 11 years ago
Share

Chancellor George Osborne received a blow ahead of tomorrow’s Autumn statement as construction buyers reported a return to contraction in the industry.

The Markit/CIPS UK Construction Purchasing Managers’ Index fell to 49.3 in November down from 50.9 the previous month.

Any figure below 50 represents a contraction in the market as the index hit its lowest level since August.

A lack of new business to replace completed contracts contributed to a marked drop in confidence regarding the outlook for the next 12 months with the weakest degree of positive sentiment since the near-record low seen in December 2008.

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 the New Year.

“Jobs have been slashed in response to the fastest fall in new orders for over three-and-ahalf years, confirming the sector’s return to contraction and the lowest levels of confidence seen since the height of the economic crisis in 2008.

“House building continues to witness falling levels of activity and the commercial sector, the shining light of construction earlier this year, is contracting at the fastest pace since late-2009.

“Civil engineering continues to be the one slither of growth in the sector.

“To add insult to injury, input price inflation eased only marginally from the ten-month high in October, courtesy of high fuel and energy costs, leaving the sector in a difficult place as it searches for relief ahead of 2013.”

Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI, 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.”

Simon Rawlinson, Head of Strategic Research at EC Harris said: “The latest PMI release is consistent with EC Harris’ view that there will be no recovery in pricing until late 2013 and clients venturing into the market in the next year will need to take particular care in selecting a stable supply chain.

“Any spending announcements that are included within tomorrow’s Autumn Statement will be very welcome however they are unlikely to provide immediate relief”.

Latest news

Laing O’Rourke makes a £288m loss

Rampant inflation on fixed-price jobs and problem contracts blow hole in accounts
6 mins ago

Wates signs Government safety remediation pact

Private builder belatedly signs fire safety developer remediation contract
4 mins ago

Keltbray, OCU and Clancy clinch £1bn electricity network upgrade

Scottish and Southern Electricity Networks awards biggest ever deals for central southern England
20 hours ago

Liverpool all-electric industrial park approved

McLaren and Caddick in chase for Sefton 800,000 sq ft Atlantic Park scheme
12 hours ago

Former Buckingham Group MD to join John F Hunt

Simon Hyams is new Managing Director for Contracting
21 hours ago

Three in race for retendered £150m A9 dualling job

Bidders take another look after client takes on more risk
24 hours ago

Clancy tops £300m revenue in fifth year of growth

Civils contractor delivers £13.5m pre-tax from water and energy sector work
22 hours ago

Tower crane collapses on Edinburgh resi site

Jib falls onto apartment block under construction: Video
2 days ago

Salboy drops office space from Viadux Phase Two

Developer to focus on Manchester residential towers of 76 and 23 storeys
2 days ago

Warwick Uni plan for science and engineering campus

370,000 sq ft science and engineering precinct submitted for planning
24 hours ago

Morgan Sindall chalks up Greater Manchester schools treble

Bury, Stockport and Wythenshawe school jobs will create 1,600 pupil places
23 hours ago

Plans in for £65m Blackpool multiversity campus

Council leads plan for Talbot Gateway learning campus
24 hours ago

Laing O’Rourke wins first phase of £700m Oxford R&D district

Landmark Red Hall and two labs to be built in phase 1a of Oxford North scheme
3 days ago

Ardmore wins retrofit deal on £200m Chancery Lane office

Building will be transformed to provide 105,637 sq ft of office space
3 days ago

Construction’s “Leading Lights” recognised

More than 50 winners in latest Considerate Constructors Scheme awards
2 days ago

Balfour Beatty clinches £20m Norfolk coastal defence jobs

Firm will install rock armour at Cromer and Mundesley
2 days ago

Architects join construction union Unite

Section of Architectural Workers forms official branch
3 days ago

Boot to build £20m lightweight aviation composites factory

Work starts on Sheffield University's COMPASS R&D facility
2 days ago

GMI secures £27m Leeds City College job

Site clearance underway for new Mabgate campus
3 days ago

Balfour signs deal with Koreans for UK power transmission jobs

Contractor strengthens large-scale onshore power transmission capability
3 days ago

36 storey south London build to rent flats tower approved

Construction to start next year on £220m Croydon scheme
3 days ago

Hunt for firms for £400m volumetric offsite deal

Procurement for Housing aims to expand its pool of firms on major offsite framework
3 days ago

Graham wins £87m Jock’s Lodge junction upgrade

Spring start for East Riding A164 improvement scheme near Beverley
6 days ago

Giant concrete pour at HS2 Curzon Viaduct: Video

Over 2,000 cubic metres create the first two 90 metre viaduct deck structures,
3 days ago

Cladding safety contractors told to wear body cameras

Insurance giant AXA to record remedial work
3 days ago

Colmore Tang Construction enters liquidation

Birmingham builder wrapped up after 10 years
6 days ago

Competition warning over Hanson deal to buy Mick George

Watchdog raises concerns over competition in East of England and the East Midlands
6 days ago

Worker lifted to safety as blaze engulfs McAlpine site

Crane driver lifts man to safety in cage from burning town centre building in Reading
7 days ago

£100m Digbeth 33-storey flats job out to tender

Clarion Housing brings 480 flats project to the market
6 days ago

Housing slump hits brickies

Younger and inexperienced bricklayers being let go first
6 days ago

Contractor services