Poor performing construction sector fuels UK economy growth fears

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FEARS that the UK economy will shrink again were fuelled by the latest snapshot of the construction industry today as it revealed a worse-than-expected fall in activity.

The Markit/CIPS construction purchasing managers’ activity index fell to 49.3 last month, down from 50.9 in October and below the reading of 50 which represents growth.

City experts had predicted a 50.5 figure but reductions in house-building and commercial projects drove construction activity lower.

Tim Moore, senior economist and survey author at Markit, said: “A protracted decline in workloads, the double-dip UK recession and shrinking investment spending has made 2012 a year to forget for the construction sector.”

Ominously for the industry, he warned signs of a greater squeeze on client budgets suggested construction output was yet to hit “rock bottom”.