Construction numbers fall again Published: 05/08/2008

The number of homes being built has dropped once again, according to new figures from the Construction Managers Index.

According to the report, the index went down to 36.7 in July, representing a one per cent fall since the previous month.

But this was significantly lower than those of previous months with 43.9 recorded in May and 56 at the end of 2007.

A year ago, the figure was as high as 64.8, showing the marked decrease over the past 12 months.

This March was the first time the figure had gone below 50.

In the housebuilding index, the number of properties being built fell for the eighth month in a row to 18.7 in July, down from 25.6 in June.

Commenting, Howard Archer, of Global Insight, said: "Housebuilders are being hit extremely hard as housing market activity and house prices crumble in the face of elevated affordability pressures, very tight lending conditions and low buyer interest."

Mr Archer said the figures show that the construction market is "firmly in recession".

He added: "Indeed, with housing market activity and prices continuing to head south, the commercial property sector in dire straits and government finance for infrastructure projects limited, the construction sector looks to be in for an extended, very difficult time."

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