Economic gloom cast a shadow over most sectors in October
In October economic malaise dented private sector confidence and cuts to public sector capital budgets continued to hit, impacting on contracts.
A gloomy picture was presented across most sectors, with awards for private housing, commercial offices, leisure and hotels work falling away. Furthermore, public sector retrenchment continued, although the social housing index held up relatively well and contracts for industrial and factories improved from last year.
Official data shows that construction output contracted modestly in Q3 and the Index offers little hope for the future. Additionally, October’s marked deterioration in private sector activity comes ahead of the recent escalation in uncertainty in the eurozone. With Italy now facing the bond market’s wrath, the crisis has reached a critical point.
The deficit needs to be addressed but the case for rethinking the austerity strategy has surely strengthened.
Kelly Forrest is a senior economist at the Construction Products Association