May purchasing index shows accelerating decline in construction activity, particularly in housing, with civil engineering the only sub-sector on the up

Activity in the UK construction industry in May declined at the fastest rate since the 10-year-old survey began, with civil engineering the only sub-sector to show a rise, according to data released today.

The Construction Purchasing Managers' Index of activity in the industry dropped to 43.9 in May, the lowest level since the survey began in April 1997. This represents a considerable decline from the previous month, which registered 46.1 on the index.

Poor performances from most of the key sectors, especially housing, contributed to the contraction, which is based on the total economic output of the construction sector.

Only civil engineering registered improved activity in May, as conditions in both the housing and commercial sectors worsened. Housing activity was particularly depressed and fell at a record survey pace as the seasonally adjusted Housing Activity Index posted a reading of 32.7 - down sharply from 40.3 the previous month. The commercial sub-sector also experienced its sharpest fall in activity levels since the survey began, although it was not as extreme.

Roy Ayliffe, director of professional practice at the Chartered Institute of Purchasing & Supply, said: “Purchasing managers saw overall activity levels in the UK construction industry decline at the sharpest pace since the PMI survey began in April 1997, with the housing sector worst hit by the effects of the credit crunch.

“May data for the sector heralded a further, more marked, contraction in levels of new business and, notably, the use of subcontractors fell at the fastest rate in survey history, as demand for their services continued to wane.”