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UK construction suffered shock fall in September down to lowest levels since Brexit referendum | UK construction suffered shock fall in September down to lowest levels since Brexit referendum |
(35 minutes later) | |
Britain's builders suffered a shock in September, taking levels of construction activity down to the lowest levels since the June 2016 Brexit vote, according to the latest survey snapshot of the sector. | |
The Purchasing Managers' Index slumped to 48.1, below the 50 mark that separates growth from contraction. | The Purchasing Managers' Index slumped to 48.1, below the 50 mark that separates growth from contraction. |
City of London analysts had anticipated a PMI reading of around 51. | |
It was the first time the index has been in negative territory since a sharp plunge immediately following the EU referendum result. | It was the first time the index has been in negative territory since a sharp plunge immediately following the EU referendum result. |
“Respondents pointed to obstructive economic conditions and the Brexit blight of uncertainty, freezing clients into indecision over new projects," said Duncan Brock of the Chartered Institute of Procurement & Supply. | “Respondents pointed to obstructive economic conditions and the Brexit blight of uncertainty, freezing clients into indecision over new projects," said Duncan Brock of the Chartered Institute of Procurement & Supply. |
Sterling slipped in the wake of the data, trading down 0.23 per cent on the day at $1.3245, as traders pared back their major bets of recent weeks on a Bank of England rate hike in November. | |
According to the PMI, civil engineering work suffered its sharpest drop since April 2013 and commercial development projects had the worst month since February 2013. | |
Markit, which compiles the survey, also reported that confidence in the industry was at its weakest in four years. | |
"The Government’s shift to a more accommodating stance in Brexit talks has done little to convince builders that clients will sanction delayed projects soon," said Samuel Tombs of Pantheon. | |
According to the most recent estimate from the Office for National Statistics, construction output fell by 0.5 per cent in the second quarter, following a 1.9 per cent surge in the first three months of the year. | |
Another quarter of contraction will put the building sector back into a technical recession. | |
The construction sector accounts for around 6 per cent of UK GDP. | |
The overall economy grew by just 0.3 per cent in the second quarter of 2017, the weakest growth rate of the G7 nations. |