Home / International/ Brexit crisis spurs collapse in UK construction orders: PMI

Brexit crisis spurs collapse in UK construction orders: PMI

Comments / {{hitsCtrl.values.hits}} Views / Wednesday, 4 September 2019 00:00


Construction cranes are seen above a refurbished Mill building in the city centre of Manchester, Britain – Reuters 

LONDON (Reuters): British construction companies suffered the sharpest drop in new orders since the depths of the financial crisis last month as the Brexit crisis scared away potential customers, a survey showed on Tuesday.

The IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) fell to 45.0 from 45.3 in July, confounding expectations for an improved reading of 45.9 in a Reuters poll of economists.

Overall, the survey is likely to add to questions over Britain’s ability to bounce back from an economic contraction in the second quarter, a hangover from the stockpiling boom in advance of the original March Brexit deadline.

Another contraction in the current quarter would officially herald a recession.

The growing signs of a wilting economy — similar to elsewhere in Europe — raise the stakes for Prime Minister Boris Johnson in his standoff with Brussels.

The PMI’s new orders index fell to its lowest level since March 2009, when Britain was deep in its last recession.

“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,” IHS Markit economist Tim Moore said. Business expectations across the construction industry as a whole, which accounts for around 6% of economic output, fell to their lowest level since December 2008.

Brexit doubts hit the commercial construction sector hardest, IHS Markit said.

Investors will be watching Wednesday’s PMI for the much larger services sector to see if the weak readings from the manufacturing and construction surveys are reflective of the whole economy.

British manufacturing contracted last month at the fastest rate in seven years, IHS Markit said on Monday.

Share This Article

Facebook Twitter


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

State of the economy of Sri Lanka

Saturday, 21 September 2019

I am not an economist nor do I profess to be an economic analyst. The views expressed in this presentation are those of a layman who has always been interested in the economic progress of Sri Lanka.

Premadasa, Père et Fils

Saturday, 21 September 2019

We are what time, circumstances and history has made of us. We are trapped in history. At age 77, I refuse to trap history in my mind. This essay is an obligation to history. Although J.R. Jayewardene introduced ‘Executive Presidentialism’, coer

Economy, business community and the Prime Minister

Friday, 20 September 2019

The speech made by Prime Minister Ranil Wickremesinghe as the Chief Guest of the Sri Lanka Economic Summit 2019 deserves very careful consideration by the country due to several reasons. This will no doubt be his last speech on economic policy to be

Sri Lanka needs to invest more on soft infrastructure

Friday, 20 September 2019

Developing countries like Sri Lanka will have to prepare for further downside risks in 2020 with the growing debt problems and the growth problems in Europe and the slowdown in Asia. Slower growth is already visible in weakening global trade and comm

Columnists More