Business morale takes another pounding

Britain first entered a recession in 2008 and since that time business morale has generally gone down, but in the last year it seemed to be improving. However, over the last few months, especially in September, it seems that morale has fallen again because construction activity in the country has contracted for the second straight month.

The Purchasing Managers Index rose in August, however this was a small improvement than economists had hoped to see, and it appeared to be a bad omen for the market. A senior economist for the company Markit has recently stated, “This shows that there is an underlying weakness in the construction sector, and it is likely that the survey is an indicator of how the rest of the year is going to play out.”

The economist, Tim Moore, continued, “The continuing falling number of orders is the longest we’ve seen in three years, which makes it the most significant nosedive that the industry is seen since 2008, when the financial recession first started.”

It is particularly disappointing that this fall in business is happening, especially when the government is making a great deal of effort to boost the fortunes of the sector. £10 billion of guarantees for loans have recently been announced by the government, which was hoped to bring a great boost to the rented housing sector, however it seems as if this is not had the desired effect. It is possible that in coming months, the situation will improve, but currently that seems unlikely. The longer-term outlook currently remains uncertain, especially with the problems that are going on in the Eurozone.