UK construction industry shrinking at fastest pace for over 10 years

The UK construction industry has deteriorated, particularly due to the slump in the housing market, which has meant that newly built housing units are proving hard to sell.

The Chartered Institute of Purchasing and Supply indicated that the purchasing managers index for the construction sector fell to 43.9 in May which is the lowest rate since 1997.

A index of housing activity fell to a record 32.7 from 40.3, and confidence in the outlook was also at the lowest ever, the report showed.

It is new housebuilders who have suffered the most as Taylor Wimpey Plc has lost 50 percent off its value in 2008, whilst Bradford & Bingley Plc, which is a specialist in the buy-to-let market, has fallen by 24 percent.

As the primary cause of the credit crunch, the housing sector was always likely to suffer and it has been especially bad as a result of the long period of stability and increasing house prices that the UK had come to reply upon.

With tightening budgets, consumer confidence and business sentiment is especially low and this has hurt the construction industry as well as oil prices and the cost of raw materials.

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