Construction activity falls at fastest rate for 2.5 years

British construction activity fell at its fastest pace in two-and-a-half years in June, the latest Markit/CIPS PMI survey has shown.

The index sank to 48.2 from 54.4 in May – its lowest reading since December 2009.

A reading above 50 represents growth in activity, while a reading below represents contraction.

Markit said respondents cited uncertainties about the economic outlook, as well as disruptions from the extra holiday to celebrate the Queen’s Diamond Jubilee and severe weather across large parts of the country, as reasons for the decline in activity.

Tim Moore, senior economist at Markit, said: “The UK construction sector moved back into reverse gear in June with output falling at its fastest pace since the end of 2009.”

Richard Threlfall, KPMG’s head of infrastructure, building and construction, said: “Today’s disappointing construction figures come as no surprise. We have seen in recent months failures of some of the biggest construction players such as the 150 year old firm Killby & Gayford. More recently we have seen the equally well-respected construction firm Doyle go into administration. 

“This is the start of a new phase in the downturn for the construction industry in the UK, driven by a waning pipeline, evaporating margins and lengthening payment periods. 

“The pressure on the industry is now becoming acute. The government needs to act now to support UK’s struggling construction industry.”