The construction industry is still “the sick man of the UK economy”
As the construction sector continued to shrink in August, the Chartered Institute of Purchasing and Supply (CIPS) today reports no signs yet of a return to growth, despite the rate of contraction being the slowest in 18 months.
The report highlights that improvements in the commercial and house building sectors were offset by a worse than expected reduction in civil engineering work, which has previously proven the most robust of the three sub-sectors.
David Noble, the CIPS’ new CEO, declared that “Though August saw a reduction in the rate of deterioration in the construction sector, it is still the sick man of the UK economy. Far from seeing signs of a return to growth, the sector remains stuck in an unprecedented eighteen month period of contraction“. He added that “Perhaps most concerning was further news of job cuts as companies tried to manage reduced levels of business”.
Whilst employment levels in the sector continued to fall during August, the rate of decline in new orders eased during August and optimism among construction companies was increasing accordingly.