Friday, September 02, 2011
Construction: slowing or Armageddon?
Posted by David Smith at 02:00 PM
Category: Thoughts and responses

Construction may only be 6% of the economy but monitoring is proving a headache. The purchasing managers' index (PMI) for construction showed, on the face of it, an encouraging picture, with growth continuing in August. Readings above 50 on this survey are consistent with growth, so the drop from 53.5 in July to 52.6 in August was consistent with slower growth, not a fall in output.

However official figures for new construction orders in the second quarter showed something close to Armageddon. New orders fell by 16.3% in the quarter and, according to the statistical release: "The total volume of all new orders is now at its lowest total since the third quarter of 1980." Most will find that hard to believe and the Office for National Statistics appears to be suffering ongoing problems with the data. Anyway, the figures are here.

Perhaps more importantly, US non-farm payrolls showed no growth at all in August, and unemployment stayed at 9.1%.