The construction sector suffered a further sharp contraction in November, driven largely by a fall in house building activity, which fell to its lowest level on record, according to a closely watched measure.

The construction purchasing managers’ index, compiled by Markit for the Chartered Institute of Purchasing and Supply, fell to a survey low of 31.8 from 35.1 in October. A reading below 50 indicates demand is contracting. The house building component fell to 23.2 in November from 25.4 in October and was less than half its 2007 level.

The component that measures new orders – giving a view of how the sector may fare in months ahead – fell sharply after declining by a record-breaking amount the previous month. The new orders component fell from 41.2 to 31.8 in November.

Howard Archer of analysts IHS Global Insight described the findings as 'absolutely dire, indicating that the sector is going from very bad to even worse'.

Financial Times, Daily Telegraph