Belfast Telegraph

Seven-year low for construction firms

By Ben Woods

The UK's construction industry recorded its weakest performance for seven years in June as it suffered from "housing market jitters" ahead of the EU referendum.

The closely-watched Markit/CIPS construction purchasing managers' index (PMI) recorded a worse-than-expected 46.0 last month, down from 51.2 in May. A score above 50 indicates growth.

The sharp contraction was driven by a "steep decline" in house building and the first fall in commercial construction work since May 2013.

It also revealed the sharpest drop in new business volumes since December 2012.

However, the majority of the responses were collected between June 13 and 29, before the result of the referendum was revealed.

Tim Moore, senior economist at Markit, said the speed of the downturn in the days leading up to the Brexit vote provided "a clear warning flag for the wider post-Brexit economic outlook".

"Widespread delays to investment decisions and housing market jitters saw the UK construction sector experience its worst month for seven years in June," he said.

"The vast majority of June's survey responses were received ahead of the EU referendum, so the worry is that the ensuing political turmoil will hit construction spending decisions for some time to come."

Belfast Telegraph