THE UK's housing sector has been dubbed the "sick man" of the construction industry after activity fell to a new low in July.
Analysts warned that the data, from the construction purchasing managers' index (PMI), showed that there was "little doubt" that the construction sector was "firmly in recession".
The report revealed there was also poor activity elsewhere in the s
ector, flagging a downbeat performance in commercial and civil engineering.
Jobs in the sector were shed at the fastest rate in more than 11 years of the survey's existence, as construction was further hit by the effects of the credit crunch.
The index – a seasonally adjusted measure of the industry's performance – dropped 2.1 points to 36.7 in July, the lowest since the survey began in April 1997. A reading below 50 represents contraction. It is the fifth month in a row that overall activity has contracted, with housing the worst-hit area, the survey showed.
The housing index fell at its sharpest rate – from 25.6 in June to 18.7 last month, also a new survey low. The residential housing sector has been particularly hard-hit by the credit crunch as banks tighten their mortgage lending criteria.
Howard Archer, chief economist for Global Insight, said: "The preliminary GDP data for the second quarter estimated that construction output declined by 0.7 per cent quarter-on-quarter, and the purchasing managers' survey suggests that the contraction could be even deeper in the third quarter.
"There can therefore be little doubt that the construction sector is now firmly in recession.
"Indeed, with housing market activity and prices continuing to head south, the commercial property sector in dire straits and government finance for infrastructure projects limited, the construction sector looks to be in for an extended, very difficult time."
About 5,000 job losses were announced in July by some of the UK's major housebuilders, including Taylor Wimpey, as they struggled with falling sales.
Last month's housebuilding job losses were reflected in the employment index from the Chartered Institute of Purchasing and Supply (Cips), which measures whether staffing levels are rising or falling in the sector. The figure was 45.6 in July, down from 47.8 the previous month.
Roy Ayliffe, director of professional practice at Cips, said: "Purchasing Managers in the UK construction sector saw conditions worsen across the board in July. Housing was again the sick man of the industry, as levels of activity plunged to a record low.
The full article contains 420 words and appears in The Scotsman newspaper.
