The UK construction industry fell to its weakest level since the 2008 financial crisis in June, according to the IHS Markit construction purchasing managers’ index.
The industry’s survey dropped to 43.1 in June, with an indication below 50 pointing to a recession. The crisis spreads across the three areas of the construction sector, namely housebuilding, commercial and civil engineering.
Housebuilding was outperforming other manufacturing sectors until May, but there is now an evident drop in business confidence, that is the sharpest in month observed in three years. This confirms a six-month-long downward trend, which is often linked to Brexit uncertainty. Firms are evidently holding back on investment, perhaps in anticipation of falling prices or an expectation of a drop in demand or worsening credit conditions. The construction sector accounts for 6% of the UK economy and 7% of the labour market.