Investing.com - Activity in the U.K. construction sector slowed last month, falling into contraction territory for the first time in 11 months, as Brexit uncertainty caused delays in decision making and led to subdued client demand.
Research firm IHS Markit said its construction purchasing managers’ index fell to 49.5 in February, its lowest level since March 2018.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
“The U.K. construction sector moved into decline during February as Brexit anxiety intensified and clients opted to delay decision-making on building projects,” Tim Moore, Economics Associate Director at IHS Markit, said.
“The recent fears over the Brexit-related impacts on the sector were realized this month, as barring the weather related blip in March last year, construction put in its worst performance since September 2017, with the PMI contracting to just below the no-change mark,” Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply that participates in the survey, said.
“In short, the foundations of the construction sector are crumbling under the weight of Brexit and businesses are switching to survival mode until the way forward is cleared," he added.
Construction activity in both commercial and civil engineering projects contracted the report said, while housebuilding saw only a modest increase in activity. With new orders falling, construction companies were also wary of hiring new workers.