BRITAIN'S construction sector shrank last month at its fastest pace since records began more than a decade ago after falling house prices and tight credit took their toll, a survey showed yesterday.
The Chartered Institute of Purchasing and Supply/Market construction index fell to 35.1 from 38.8 in September. That was the eighth consecutive month the index has been below 50, the level which marks contraction, and the lowest since the series began in 1997.
"There was no let-up in October for struggling constructors as the global economic and financial malaise continued to unnerve the sector," said CIPS director Roy Ayliffe.
The Bank of England is expected to cut rates by at least half a percentage point from 4.5 percent tomorrow, potentially boosting a construction sector which has struggled since the credit crunch pushed up financing costs.
Employment and new orders both fell at the sharpest pace since the series began, suggesting contractors are braced for a lengthy downturn.
Of the three sub-sectors, housing construction recorded the sharpest contraction, falling to 25.2 from 26.1. Commercial construction also performed poorly, with activity falling at a series-record pace. Civil engineering fared best, although it too saw a contraction in output.
Philip Shaw, an economist at Investec, noted that without government spending the figures would have been even worse. "I think it emphasises the broadness of the economic downturn in the UK," he said. "Construction is not just the housing market but also includes investment in buildings and works."
Housebuilder Bellway is cutting prices by 25 percent at some developments.