LONDON: Britain’s construction industry suffered its worst month in more than 10 years in June as the Brexit crisis put companies off long-term investment, a survey showed on Tuesday, adding to signs of a slowdown in the British economy overall.
The IHS Markit/CIPS construction Purchasing Managers’ Index (PMI) plunged to 43.1, the lowest reading since April 2009 when the country was gripped by the global financial crisis. Economists had expected the index to improve to 49.3 from May’s 48.6.
“Worrying signals from the survey’s forward-looking indicators make it almost impossible to sugarcoat the construction PMI data in June,” Tim Moore, associate director at IHS Markit, said.
“In particular, new orders dropped to the largest extent for just over 10 years, while demand for construction products and materials fell at the sharpest pace since the start of 2010.” The hit was felt across the breadth of the sector: homebuilding shrank for the first time in 17 months, commercial work fell for the sixth consecutive month and civil engineering contracted by the most since October 2009.
The survey pointed to only a marginal fall in workforce numbers, however, and some firms said they retained staff in anticipation of a recovery in sales.
Construction accounts for 6 per cent of Britain’s economy, which has relied on spending by consumers to offset the drag on corporate activity caused by the lack of clarity over the country’s delayed departure from the European Union. — Reuters
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