Construction sector orders, reported by the regular ONS construction index, fell 14% and service sectors experienced a similar slowing in growth in orders, perhaps indicating a halt to the first signs of recovery that had previously appeared in recent months.

The figures combine to point towards a GDP growth of just a half percent in Q3, while the figures for employment prospects in both the constructions and services industry showed declining growth.

As the UK government continues to rapidly scale back public sector investment, construction firms who would ordinarily be involved in capital projects have noticed a considerable downturn in business.

Fortunately, the markets have not reacted too badly to the announcement, and the FTSE had entirely recovered from a minor blip by lunchtime to carry on unaffected.  Particularly with other, conflicting reports from the manufacturing industry, it may be the case that the UK economy will survive the short term implications of public sector cuts while being positioned to grow a leaner, more effective and efficient economy over the medium term.

The Engineering Employers Federation, which produces regular forecasts on the manufacturing sector, projected a growth in national manufacturing output over 2010 of 3.7%, with a similar rise of 3.2% scheduled for the following year – figures which are supported by a forecast rise in employment numbers, particularly amongst part-time and casual staff.

However, the report cited fears over public sector cuts and the likely impact of tightening government spending as the economy continues its slight turn towards growth.

Likewise, difficulties in the US economy and the widespread uncertainty surrounding the immediate future direction of US government policy could undermine the rising demand for UK manufactured products overseas, and could resultantly hamper the recovery of the industry.

However the news will come as a pleasant surprise for the manufacturing industry, particularly advanced manufacturing sectors, which have outperformed in recent years as a result of rising demand amongst the EU, US and emerging economies.

Of the largest ten trades executed through the TD Waterhouse platform, around 52% were banking stocks, with traders investing in stocks twice as heavily as those selling.  As a result, the prices for banking securities have risen considerably on the FTSE, which has been buoyed by and helped the prices of other major tradable assets.

The leading banking stock was Barclays, which proved most popular amongst buyers and the fourth most common amongst sellers, amidst speculation of a forthcoming bond issue to shore up its balance sheet.  RBS was also a strong performer, traded heavily in both directions on the potential it may have to offload its insurance division over the next three years.

Natural resources were heavily sold over the same period, as services stocks presented a more viable alternative trade.  With the prospect of further growth, particularly in the banking sector as the economy moves out of recession, these early signs of growth from the industry appear to have been sufficient to buoy investor interest in returning to financial services investment.

A survey of the Chartered Institute of Purchasing and Supply, which measures business confidence across core economic sectors, reported a fall in its CIPS services index by almost 2 points in August, reflecting a continued bleak outlook amongst service based businesses as rising unemployment compounds fears of a staggered recovery.

The CIPS construction index showed a similarly bleak picture, losing almost 2 points on its index over the last month off the back of dwindling demand and a shortage of public sector capital projects.

With the extensive public sector cuts and a rollback of government infrastructural projects, growth strategy is focused on private sector expansion, to mop up the additional unemployment left by public sector redundancies.

While the new UK government has fallen subject to extensive criticism, particularly from the traditional left, over its decision to reduce economic dependency on the state and to cut the extent of national borrowing over time, economists are now forecasting that while the immediate future might see stinted growth, the long-term effects of current economic policy is to build a leaner, more efficient foundation for growth and recovery.

US unemployment figures showed a fall in employment numbers by just 54,000 in August – down from 131,000 in the previous month, and down even further from the general analysts’ forecast of 100,000 job losses, resulting in strong closes on markets in the US, Europe and the UK.

As a result of recovering economic fortunes and vital signs emerging within the previously stagnant construction industry, the lower than expected drop in employment numbers is seen as a bellwether for potentially improving economic conditions, allowing markets to rally behind the stock markets in anticipation of improving performance.

The announcement comes alongside a statement from President Obama citing the need for a growing US middle class as part of the process of sustainable economic recovery.  With a raft of tax breaks and economic stimuli, and wide-ranging rhetorical pledges to support the traditional US middle class, it is hoped that the impact of the measures will be felt globally over the coming months.