Morgan Sindall has issued a profit warning for 2009 on the back of weak trading in the housing and fit-out markets.

In an update to the City, the 拢2.1bn-turnover group said challenging conditions in the commercial property and open market affordable housing sectors would hit its bottom line next year. As a result it plans to switch more resources to the social housing market.

It said: 鈥淭he volume of open market house sales for 2008 is expected to be around half the level achieved last year, when it accounted for 6% of group revenue.鈥�

The consensus pre-tax profit forecast for 2009 was 拢70m but analysts have revised that figure to closer to 拢60m after the warning.

According to the company, the fit-out market is 鈥渟oftening鈥� despite the fact it is on track to hit turnover forecasts of 拢475m this year. In the construction sector the picture was of strong public sector demand and a weakening commercial market.

Morgan Sindall鈥檚 shares were down 12% at 657p in early trading on Tuesday morning.

Meanwhile, ISG has said it is 鈥渃autious鈥� about the prospects for the smaller commercial fit-out sector although trading for the year ended

30 June 2008 was in line with expectations. Its order book is in excess of 拢1bn compared with 拢800m at the same point in 2007.

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