UK commercial construction activity fell during September at the fastest pace since the Chartered Institute of Purchasing and Supply (CIPS) began measuring it in 1997, amid a record pace of job-shedding in the sector as a whole.

Housebuilding activity meanwhile declined very sharply again last month, the CIPS survey showed, as the overall construction sector suffered a seventh consecutive month of falling activity.

CIPS' purchasing managers' index for construction, a composite measure of activity in the sector, fell from 40.5 in August to 38.8 in September.

This is well below the level of 50 which separates expansion from contraction and signals a rapid deterioration in construction sector activity.

CIPS commented: "The latest, and steeper, decline in total UK construction activity was linked by most survey participants to the ongoing financial crisis and poor global economic conditions.

"Competition to secure contracts intensified during the latest survey period, resulting in more unsuccessful tenders and smaller order books at many survey panellists' firms."

The commercial construction activity index fell to 36.4 - the lowest on record.

The index for housing construction dropped to just 26.1.

At 41.2, the construction new orders index posted its second-worst reading in the history of the survey.

The employment index fell to 42.3 - signalling a marked acceleration in the rate of job-shedding.

Confidence among construction firms about activity levels over the coming year fell to the lowest level in the survey's history.

Roy Ayliffe, director of professional practice at CIPS, said: "As the volatility of the world's financial markets reached fever pitch in September, purchasing managers reported a fall in activity levels throughout the UK construction economy, as companies laid off staff at a considerable pace and sharply reduced buying activity.

"Fierce competition for new contracts persisted and intensified, resulting in yet more fruitless tenders and diminishing order books.

"Housing again took a battering and was joined by the commercial sub-sector in terms of bleak performance.

"In the face of myriad obstacles, including rocketing energy prices, UK constructors were dejected and their confidence about the future performance of the sector hit a record low."

Civil engineering was the best-performing of the construction sub-sectors, showing only marginal contraction in September.

The pace of decline in this sub-sector has now eased for two consecutive months.