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Construction workers build at a block of residential riverside flats in west London March 27, 2009.
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LONDON - The decline in activity in the country's construction sector accelerated in June, but firms were optimistic about the future, a survey showed on Thursday. The Chartered Institute of Purchasing and Supply/Market construction PMI index fell to 44.5 in June from 45.9 in May, the 16th straight month below the 50-level that separates growth from contraction and indicating a faster pace of decline.
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The survey showed housebuilding and commercial construction declines accelerated last month. And nearly a third of construction firms reported job cuts.
A sharper than expected fall in construction output was part of the reason for the huge downward revision to GDP in the first quarter of this year and analysts said the sector remained in poor shape.
"With the housing market still very low by past norms and the commercial property sector remaining under serious pressure, serious concerns remain about the outlook for the construction sector," said Howard Archer, economist at IHS Global Insight.
Still, the survey showed orders fell at a broadly similar pace in June as in May and firms were "extremely positive" about the outlook, reflecting greater confidence in the economic outlook.
Separate figures from the Office for National Statistics showed new construction orders in the three months to May were down 1 percent compared with the previous three months and were 30 percent lower than a year ago.
(Editing by Mike Peacock)
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