The UK construction sector shrank at its fastest pace since records began, hammered by falling property prices and the squeeze on credit, figures from the Chartered Institute of Purchasing and Supply revealed yesterday - adding fuel to the growing consensus that interest rates will fall by a full percentage point tomorrow.
The UK Construction Purchasing Managers' Index for November fell to 31.8 from October's 35.1, marking the ninth consecutive month the index has remained below 50, the level which separates contraction from expansion.
The grim detail of the survey paints a bleak picture of life in the formerly booming construction sector, as companies grapple with the consequences of the growing reluctance of banks to lend.
New orders, industry output, employment, sub-contractor usage and buying activity all continued to plummet, falling at the fastest rate since the survey began in April 1997 - with housing the hardest hit part of the sector of all.
The CIPS survey is also the latest in a plethora of indicators showing the UK economy is heading into a painful and most likely protracted recession, as banks rein in lending to shore up their balance sheets.
The government has taken unprecedented action to keep the banking system afloat, but it is still struggling to get banks lending again.
Recent interest rate cuts from the Bank of England have so far done little to turn the tide of pessimism.
The central bank's Monetary Policy Committee is expected to cut rates by a further percentage point this week, having slashed them by a cumulative two percentage points since October to 3%, their lowest level since the 1950s.
Roy Ayliffe, director at CIPS, said: "The unyielding global economic challenges continued to depress the UK construction sector in November, reflected by the PMI falling to its lowest-ever reading.
"Purchasing managers reported significant falls in new orders, industry output and employment, providing yet further evidence of the deterioration in the sector."
The survey also noted input deflation for the first time in almost 10 years.
UK property prices have fallen 15% over the past year - faster even than during the recession of the early 1990s - and show no sign of stopping.
While Scottish house prices had been performing relatively better than the rest of the UK in the early part of the year, a recent Nationwide survey revealed the average value of a property sold north of the border between July and September was £141,657, a decline of 7.1% on the same period last year.
However, the reduction in total industry activity was evident across all three of the monitored sub-sectors - housing, commercial engineering and civil engineering.
l Separately, Stirling-based builder and mini-conglomerate Ogilvie said it achieved its eighth year of continued growth after posting results for 2008 that show a 20% increase in turnover to £258m.
Accounts for the year to the end of June show that pre-tax profit fell to £5.7m, compared with £6.4m the previous year, reflecting lower margins as a result of the dramatic slowdown in the housing sector.
