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Construction sector contracts for first time since 2001

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Date: Wednesday 02 Apr 2008

LONDON (ShareCast) - Activity tailed off in the UK construction sector during March for the first time in over six years, according to a new report released today.

The Chartered Institute of Purchasing and Supply’s purchasing managers’ index for the construction sector sank to 47.2 last month from 52.4 in February.

It was the first read of below 50, an indication of contraction for the sector, since November 2001 and was far worse than the read of 52 expected by economists.

“It is clear that tougher global market conditions are really starting to make their impact,' said director of professional practice at CIPS, Roy Ayliffe.

New order volumes fell to a new low at 48.9, the first drop below 50 in around 9½ years, while construction of residential and commercial property also took a battering.

Costs rose at their fastest in over three years due to further increases in fuel and metal prices, evidenced by a rise in the input prices component to 74.4 from 73.2.