"December rounded off a miserable year for the UK construction sector"
- Tim Moore, senior economist at Markit
Activity in the U.K. construction sector shrank by most in six months in December, driven mainly by a steep reduction in housing activity. The Markit/CIPS Construction Purchasing Managers' Index dropped to 48.7 last month, compared to 49.3 a month earlier. Index dipped further below the 50 level that separates growth from contraction, while analysts expected index to improve by 0.2 in the last month of 2012. At the same time, activity in the housing sector declined at the fastest pace in two years, while commercial construction activity contracted for the fifth month in a row. Yesterday's data are adding to concerns that the U.K. economic recovery will remain weak.
"December rounded off a miserable year for the UK construction sector," said Tim Moore, senior economist at Markit and author of the survey. "Survey respondents are also relatively subdued about the 2013 outlook amid reports from their clients that budgets will be under even greater pressure over the year ahead."
"A sharp and accelerated downturn in housing activity was the most striking feature among the overall weakness shown by December's PMI survey. The pace of contraction in residential building was the strongest since the snow-related drop two years previously, and the extent of the decline made December 2012 one of the worst months for housing activity since the spring of 2009," he added.
© Dukascopy Bank SA