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UK Construction Industry Trembling due to Sluggish Housing Market
Jul 21, 2008

CIPS revealed that due to a decline to 32.7 point in housing sector of the country, the UK construction industry is facing downward growth.

According to CIPS (the Chartered Institute of Purchasing and Supply), UK, in May 2008, its Construction Purchasing Managers’ Index (that measures comprehensive industry performance) recorded 43.9 (figure of 50 represents growth), which is the lowest reading since the survey began in April 1997, as reported by
24Dash.

CIPS reveals that in May 2008, the UK housing sector dropped to nearly 32.7 over 40.3 in April 2008. Moreover, sales of commercial building also dropped at a fast pace. The new order levels for construction industry dropped from March to May 2008 and reached 45.9 in May this year.

Industry experts identified slowdown in housing sector of the UK as major reason behind the decline in construction sector of the country. Moreover, due to scarcity of credit and increasing prices of houses, the housing industry is going downward.

Furthermore, rapidly increasing prices of various products like food, oil and metal and high rate of mortgage is leading to a rise in consumer spending, thus affecting the UK construction industry badly. Also, the extension of limited funds from the UK government due to shortage of funds is leading to weak construction sector of the country.

Moreover, declining confidence of consumers, business sentiments and limited budget are some other factors leading to a decline in prices of raw materials and putting the construction sector under threat. Also, deteriorating conditions of the UK economy are discouraging various construction companies from building new homes. Several builders also dropped their new schemes due to decline in the UK housing sector.

A Research Analyst at
RNCOS said “The UK’s deteriorating financial conditions are leading to drop in demand for new houses and thereby slowdown in construction sector of the country. Also, due to this slump, investors are not ready to touch the sector and this is harmful for the economy of the UK. Thus, to maintain the interest of customers in the industry, realtors should offer attractive schemes, such as easy lending.”

Related Market Research Reports:
Opportunities in Indian Housing Sector (2006-2007)