British construction PMI continues to plunge in August

2019-09-03 13:24

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LONDON, Sept. 3 (Xinhua) -- British construction purchasing managers' index (PMI) hit 45.0 in August amid political uncertainty, with the sharpest reduction in new orders since March 2009.

According to a survey published Tuesday by The IHS Markit/CIPS, a London-based global information provider, the PMI reading was 45.0 in August, down from 45.3 in July, with the fourth consecutive month below the 50.0 neutral benchmark.

Survey showed all three broad categories of construction work fell in August, led by commercial building.

Notably, new orders received by construction companies plummeted at fastest pace in August since March 2009.

Tim Moore, economics associate director at IHS Markit, said that: "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 in 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,"Moore added.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said that: "The sector fell deeper into contraction as continuing uncertainty and a weakened UK economy took a sizeable bite out of this month's construction activity."

"Inevitably business confidence followed suit, dropping like a brick to its worst since December 2008 and close to the lowest depth seen in the previous recession,"Brock said.

"As Brexit creeps closer and confusion still reigns, this will undoubtedly heap more pressure on the UK Government to create much-needed clarity in the market," said Brock, adding that "The commercial sector particularly has been devastated by reluctant clients fearful of taking a wrong turn in a confusing landscape and delaying project starts, resulting in the fastest drop in new orders since March 2009. "

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