Construction activity "rooted in contraction territory"

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Activity in the UK construction sector remains “rooted in contraction territory”, according to new figures.

Research group Markit said its Purchasing Managers Index (PMI) survey, run in conjunction with the Chartered Institute of Purchasing & Supply, scored 49.5 in September.

This was up fractionally from 49.0 in August, but below the 50.0 ‘no-change’ mark for the second month running.

Residential building was the worst performing broad area of the UK construction sector during September, Markit said, continuing a trend seen throughout most of 2012-to-date.

The latest drop in house building work was the most marked since December 2010, it added.

Commercial activity also dropped in September, and at the fastest rate for just over two-and-a-half years.

However there was some good news: a return to civil engineering growth helped soften the overall downturn in construction output.

The rise in civil engineering activity in September was the first for four months, Markit reported.

Tim Moore, senior economist at Markit, said: “Temporary factors such as the Olympics and an extra working day relative to second quarter somewhat cloud the interpretation of third quarter UK GDP.

"But the principal take-out from September’s PMI survey is that underlying construction weakness is likely to continue for the remainder of 2012.”