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Construction sector suffers further downturn

Output in the construction industry shrank in the month following the Brexit result at the fastest pace since June 2009, a survey has found.

The Markit/CIPS purchasing managers’ index (PMI) for the sector fell to 45.9 in July, down slightly from June. Anything below 50 indicates the sector is contracting.

PMI surveys are based on replies to questionnaires sent to purchasing executives and are an early indicator of economic performance. The index is produced jointly by the data firm IHS Markit and the Chartered Institute for Procurement and Supply.

“UK construction firms frequently cited ongoing economic uncertainty as having a material negative impact on their order books,” said Tim Moore, author of the report.

“In particular, survey respondents noted heightened risk aversion and lower investment spending among clients, notwithstanding a greater number of speculative enquiries in anticipation of lower charges.”

The report follows a previous Markit/CIPS survey indicating a sharp downturn in factory activity.

 

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