Setback as construction remains weak

The Markit/CIPS construction purchasing managers’ index (PMI) rose to 49.5 from 49 in August, a smaller improvement than economists had forecast and below the 50 line that separates growth from contraction.

“The principal take-out from September’s PMI survey is that underlying construction weakness is likely to continue for the remainder of 2012,” said Tim Moore, senior economist at Markit.

“The current stretch of falling new orders is now the longest seen for three years... (and) a lack of new projects meant that confidence... remains close to its lowest since the UK economy nosedived into recession during 2008.”

The weak outlook comes despite Government efforts to boost the sector, with £10bn of loan guarantees to build rented housing announced last month, on top of £40bn of infrastructure guarantees and a Bank of England scheme to lower borrowing costs for households and smaller businesses.