ºÃÉ«ÏÈÉúTV

Shares in the construction sector had another bad week last week, with rises the exception to the rule.

Things were not helped by nerves in the USA about further interest rate rises and a potential slowdown in what had been a buoyant housing market, which has hitherto boosted UK housebuilders with a US presence.

For a second consecutive week contractors, housebuilders and materials companies all contributed to a fall in the construction and building materials index of 1.3% to 3672.

One of the few exceptions was Mowlem, which against the odds rose 4% to 168.5p, at a time when other contractors fell. This was the single biggest rise of the week, aided by speculation that it is a prime takeover target. Despite the fact that it has written off £70m after a review of contracts in construction, analysts believe it has turned the corner, and some in the market think that it would be a good buy for an acquisition-hungry company.

One other notable exception to the slump was Kier Group, one of the best performers of the year, which bucked the trend when shares rose 2% to 1103p.

Other contractors fared less well. The week before last Balfour Beatty’s shares held steady after the news that it had been fined £10m for its role in the 2000 Hatfield rail crash, but last week it did not escape the downbeat mood of the market and fell almost 4% to 301p.

Others affected included Carillion, down 3.9%, and Morgan Sindall, down 3.4%.

FTSE 100 materials companies Wolseley and Hanson dropped 2% to 1150p and 3.7% to 555.5p respectively.

The news was not much better in the support services sector with shares in consultant WSP, which has been a strong stock, down 5.4% to 350p, and Amec down 3.8% to 332.25p.

Mouchel Parkman had a good week however, up 3.7% to 277p ahead of its annual results this week.

The best performing construction-related company of the support services sector was Hyder Consulting, which rose 5.4% to 225.5p. It has been riding high after a strong set of annual results which showed that its expansion in Australia has paid off. Overall the construction industry outperformed the All-Share, which dropped 1.6% to 2643.