Tuesday 2 July 2019 10:18 am

UK construction sector suffers worst output in 10 years

Activity in the UK construction sector “dropped like a stone” last month as suffered its steepest fall in output since the height of the financial crisis, according to a closely followed industry index.

Construction activity plummeted to its lowest level since April 2009 in June, on the back of the sharpest drop in UK housebuilding demand for three years.

Read more: UK manufacturing experiences worst month in six years

IHS Markit’s UK Construction Purchasing Managers’ Index (PMI) revealed that total construction activity fell to a reading of 43, sharply down from 48.6 in May.


Anything below a measure of 50 marks a decline in activity on the PMI index.

Commercial construction dropped for the sixth month in a row, recording its steepest fall since December 2009 in the process.

Construction firms told IHS Markit that delays to projects as a result of Brexit uncertainty had hurt commercial activity, leaving it the worst performing area in the sector.

Civil engineering output also declined at the quickest rate since October 2009. Political uncertainty, delays to new projects and longer waiting periods for the award of new contracts all hurt activity.

Meanwhile new orders dried up, sinking to their lowest level in a decade.

“Purchasing activity and new orders dropped like a stone in June,” said Duncan Brock, group director at the Chartered Institute of Procurement & Supply.

“This abrupt change in the sector’s ability to ride the highs and lows of political uncertainty shows the impact has finally taken its toll.”


IHS Markit pointed to “weakness across the board”, but warned that political uncertainty over whether the UK leaves the EU with a deal or not has spread to the housing market.

It came as UK house prices endured another “subdued” month of growth, according to today’s Nationwide house price index.

Read more: UK house prices: Growth hits four-month low

Tim Moore, associate director at IHS Markit, warned the figures were so bad it was “almost impossible to sugarcoat” the industry’s performance.

“While the scale of the downturn is in no way comparable that seen during the global financial crisis,” he said, “the abrupt loss of momentum in 2019 has been the worst experienced across the sector for a decade.”

Sterling fell 0.22 per cent against the dollar to $1.261 this morning.

The UK’s manufacturing sector recorded its worst month in six years in June, IHS Markit said yesterday.

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