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Construction activity nears decade-low

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Date: Friday 02 May 2008

LONDON (ShareCast) - Activity and confidence levels in the UK construction sector crumbled to their lowest levels in almost a decade, according to the Chartered Institute of Purchasing and Supply Friday.

The monthly report revealed its purchasing managers' index (PMI) remained below 50, under which indicates contraction, for the second month in a row.

The PMI fell from 47.2 in March to 46.1 the month before, a figure not seen since October 1998. Analysts had pencilled in a read of 47.

The weak economic conditions, particularly in the housing market, and reduced tendering opportunities were blamed for the contraction.

“Worryingly, growth in the UK construction sector has fallen at the sharpest rate in almost nine-and-a-half years as purchasing managers reported significantly lower levels of output and new orders,” said Roy Ayliffe, director of professional practice at CIPS.

Overall optimism about growth prospects for the year ahead fell to 60.1, while soaring raw material prices raised input costs for construction firms last month.