-Output declines during August amid marked fall in new work
-Second-sharpest fall in new business since April 2009
-Outlook at weakest since before mid-2008
-Input price inflation accelerates

The UK construction sector purchasing managers' index for September has come in at 49.5 points, versus the previous month's reading of 49.

The consensus estimate had been for an increase to 49.8, while the long-run series average comes in at 54.2.

The fall in new business inflows was the second-sharpest rate in almost three-and-a-half years (sub-index rose 47.6 from 47.3).

In turn, that led to subdued confidence about the year-ahead outlook for output in the construction sector (increased to 1.5 points to 55.7). The degree of positive sentiment about the prospects for activity was among the lowest seen since the start of 2009.

Staffing levels actually increased in September (to 52.2 from 50.1), following stagnation during the previous survey period.

Lower workloads resulted in another drop in input buying across the UK construction sector during September. Delivery times from vendors lengthened markedly, which construction firms widely linked to low stocks at suppliers.

Input price inflation meanwhile accelerated for the third month running to its highest since March (to 57.7 from 56.7), driven by increased costs for fuel and a range of raw materials during the latest survey period.

Residential building was the worst performing broad area of the UK construction sector during September (fell to 45.3 from 46.6). Commercial activity also dropped (falls to 49 from 49.7), and at the fastest rate for just over two-and-a-half years. A return to civil engineering growth (up to 52.5 from 47.3) after four months, nonetheless, helped soften the overall downturn in construction output.

For Tim Moore, Senior Economist at Markit, "UK Construction PMI data for September presents another bleak assessment of business conditions in the sector. The current stretch of falling new orders is now the longest seen for three years, reflecting shrinking underlying demand alongside delays in spending from both public and private sector sources."

In a similar vein, David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: "September's figures show the construction sector's cupboard to be well and truly bare, rounding off a disastrous quarter. After the longest continual decline in new orders for three years, this is of no surprise. Looking ahead, there is little to be positive about (...) All of this points to an ominous future. In the absence of investment of some kind, we are likely to see this level of activity continue for some time, or possibly even drop further."

AB

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