Construction activity falls fuel recession fears

The Times has warned that the prospect of a recession loomed closer as figures published yesterday showed that construction activity dropped to its lowest level since 1997 and analysts prepared for a round of bad news from the service sector.

The paper reported that the construction purchasing managers' index (PMI) survey fell to 36.7, from 38.8 in June as firms struggled to cope with the rising cost of raw materials and the slowdown in the mortgage market.

Meanwhile recent job cuts in the sector have accounted for the fastest contraction in employment in the sector since records began 11 years ago.