LONDON (ShareCast) - Conditions in the downtrodden construction sector worsened in June, suggesting any recovery will be a volatile affair.
The CIPS/Markit purchasing managers' activity index dropped to 44.5 last month, down from a 12-month
high of 45.9 in May, but up from 27.8 in February.
Today's data means the sector has contracted for each of the last 16 months, having been stuck below 50, which indicates no change in activity.
Separately, the Office for National Statistics found that construction orders fell 28% in May versus the previous year, but by just 1% in the three months to May versus the three months to February.
"Overall, the evidence suggests that the worst of the contraction is over for the contraction sector, but it is still very fragile," says Howard Archer, chief UK economist at IHS Global Insight.
"While construction output is highly likely to have contracted again in the second quarter, the rate of decline should have been substantially less than the 6.9% quarter-on-quarter drop suffered in the first quarter."
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