UK construction activity slumps to 11-month low
According to the Purchasing Managers’ Index, construction activity in the UK slowed to an 11-month low in July on the back of political uncertainty and nervousness among businesses about Brexit. The Index came in at 51.9, the lowest since August 2016. It’s down from 54.8 in June, and well below the 54.5 reading that City of London analysts had expected.
The commercial activity index slipped from 52.2 to 47.6, its lowest since the immediate aftermath of the Brexit referendum in June 2016. Housing construction activity also moderated, although remained in positive territory.
“Worries about the economic outlook and heightened political uncertainty were key factors contributing to subdued demand. Construction firms reported that clients were more reluctant to spend and had opted to take longer in committing to new projects,” said Tim Moore of IHS Markit, which compiles the PMI survey.
Construction accounts for around 6% of the economy. Last week, the Office for National Statistics estimated that the sector contracted by 0.9% in the second quarter of 2017, helping to deliver lacklustre overall GDP growth of 0.3%. This followed a 1.1% expansion for construction in the first quarter.
