UK PMI Construction PMI dropped to 45.0 in August, down from 45.3 and missed expectation of 46.7. It’s the fourth consecutive month of sub-50 contractionary reading. Additionally, new orders fell as fastest pace for over 10 years since March 2009. Construction output dropped for the fourth month in a row. And business optimism sank to its lowest level since December 2008.
Tim Moore, Economics Associate Director at IHS Markit, which compiles the survey:
“Domestic political uncertainty continued to hold back the UK construction sector in August, with survey respondents indicating that delays to spending decisions had contributed to the sharpest fall new work for over 10 years.
“Construction companies noted that rising risk aversion and tighter budget setting by clients in response to Brexit uncertainty had held back activity, particularly in the commercial sub-sector. Commercial construction activity fell at a steep and accelerated pace during August, which more than offset the softer rates of decline in house building and civil engineering work.
“Concerns about softening demand for new projects resulted in a fall in business optimism across the construction sector to its weakest since December 2008. This provides an early signal that UK construction companies are braced for a protracted slowdown as a lack of new work to replace completed contracts begins to bite over the next 12 months.”
