04/02/2013 02:30 PM
Construction in the UK has suffered another setback over the past month after a new report revealed that building work slowed down.
The latest Markit/CIPS purchasing managers' index showed that the industry remained at 48.7 in the past month, which was the same figure recorded in December, and has prompted fears that the sector could potentially drag the economic growth back down in the coming year.
The index, which tracks signs of growth and contraction, marks anything below the 50 level as being a downturn and the January figure fell short of the predicted economists' forecasts of 49.1 which is yet another blow to the industry.
It comes just days after accountant PwC noted that over 5,500 construction companies went bust over the past two years which equated to a rate of 53 insolvencies a week. However, while this figure highlights the ongoing problems within the sector the past three months did offer some solace as the number of administrations dropped by 12 per cent on the previous quarter.
Jonathan Hook, PwC's engineering and construction leader, said: "Whilst there has been a decline in the number of insolvencies over the last quarter the industry remains under severe pricing and cash flow pressure. I anticipate further failures in the supply chain over the coming period with the first half of this year being the peak point for failures in the sector."
Tim Moore, economist at Markit, told the Guardain that January has been a trying month for the construction sector with snowfall being partly to blame.
Mr Moore explained that the adverse weather conditions which were prevalent at the turn of the year had been a contributing factor to slowdown in work and is alongside a host of difficulties that have affected the industry in recent months.
"January's survey results are yet another indicator of the severe underlying fragility across the UK construction sector, with output failing to rise in any of the three monitored sub-sectors for the first time since last summer," Mr Moore added.
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The latest Markit/CIPS purchasing managers' index showed that the industry remained at 48.7 in the past month, which was the same figure recorded in December, and has prompted fears that the sector could potentially drag the economic growth back down in the coming year.
The index, which tracks signs of growth and contraction, marks anything below the 50 level as being a downturn and the January figure fell short of the predicted economists' forecasts of 49.1 which is yet another blow to the industry.
It comes just days after accountant PwC noted that over 5,500 construction companies went bust over the past two years which equated to a rate of 53 insolvencies a week. However, while this figure highlights the ongoing problems within the sector the past three months did offer some solace as the number of administrations dropped by 12 per cent on the previous quarter.
Jonathan Hook, PwC's engineering and construction leader, said: "Whilst there has been a decline in the number of insolvencies over the last quarter the industry remains under severe pricing and cash flow pressure. I anticipate further failures in the supply chain over the coming period with the first half of this year being the peak point for failures in the sector."
Tim Moore, economist at Markit, told the Guardain that January has been a trying month for the construction sector with snowfall being partly to blame.
Mr Moore explained that the adverse weather conditions which were prevalent at the turn of the year had been a contributing factor to slowdown in work and is alongside a host of difficulties that have affected the industry in recent months.
"January's survey results are yet another indicator of the severe underlying fragility across the UK construction sector, with output failing to rise in any of the three monitored sub-sectors for the first time since last summer," Mr Moore added.
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