-Headline Nov Construction PMI 49.3 Vs 50.9 In Oct
-Markit/CIPS Notes 3rd Negative Number In Four Months
-Lowest Headline Construction PMI SInce August
-New Orders See Weakest Growth In 3 And A Half Years

LONDON (MNI) – UK construction activity slipped contracted again
last month – for the third time in four months, driven by a slump in new
orders which saw their most negative growth in three and a half years.

This lack of new business to replace completed contracts prompted a
marked drop in confidence regarding the outlook for the next 12 months.

Confidence in the sector also slumped and jobs were cut again.

Latest data pointed to the weakest degree of positive sentiment
since the near-record low seen in December 2008. As a result, jobs were
cut again in November, and at the fastest pace for almost two years.

Adjusted for seasonal factors, the Markit/CIPS UK Construction
Purchasing Managers’ Index PMI posted 49.3 in November, down from
50.9 in the previous month and its lowest level since August.

The latest reading was much lower than the long-run average (54.1)
and below the neutral 50.0 mark for the third time in the past four
months.

Lower levels of construction activity were driven by reductions in
house building and commercial activity. Residential building has dropped
for six months running, while the latest fall in commercial construction
was the steepest since December 2009. In contrast, civil engineering
activity increased again, and at the most marked pace for seven months.

Tim Moore, Senior Economist at Markit and author of the Markit/CIPS
Construction PMI, said there was a lot more weakness to come in
construction:

“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

Attention now shifts to Wednesday’s service sector PMI release, the
most important of the three in the PMI series, given the UK’s dominant
services sector. While manufacturing came in stronger than expected,
activity is doing little more than stabilising.

Services growth was flat in October and is expected to stage a
bounce in November but the October PMI services data suggested little
confidence in the immediate outlook.

–London newsroom: 4420 78627492; email dthomas@mni-news.com

[TOPICS: M$B$$$,MABDS$]