The new Index reveals more contracts wins in retail and private housing but other sectors see work dry up

Good news about the UK economy has become increasingly fleeting as 2011 has progressed, writes Kelly Forrest.

Turmoil in the eurozone has rendered invalid the initial plan to export our way out of trouble. Households are feeling the pinch from low wage growth and high inflation and faced with uncertainty the private sector has opted to sit on its haunches and wait to see what happens.

For construction, the outlook is becoming increasingly ominous. Overall, the new CPA/Barbour ABI Index stabilised at 116 in September, but there was considerably more activity in some sectors than others.

Overall stability conceals an increase in the number of contract awards for private housing development and activity by supermarkets embarking on bullish expansion plans was sufficiently strong to drive an overall increase in retail.

Elsewhere, the third quarter ended on a gloomier note. Average value of contracts in the warehouse and factory sectors fell after a relatively strong 2010.

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