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”.