LONDON, (Reuters) - Britain's construction industry had its worst month in more than a year in May as customers postponed investment in the face of Brexit uncertainty and the sector lost jobs at the fastest rate since 2012, a survey showed on Tuesday.
The IHS Markit/CIPS construction Purchasing Managers' Index (PMI) fell to 48.6, the lowest reading since March 2018, when the country was in the grip of an unusually cold winter.
Economists polled by Reuters had expected the index to remain at 50.5.
"Commercial building remained hardest-hit by Brexit uncertainty, with construction firms reporting the steepest fall in this category of activity since September 2017," Tim Moore, associate director at IHS Markit, said.
Civil engineering work fell for a fourth straight month -- the longest such run since the first half of 2013, when Britain was still in the shadow of the financial crisis -- and growth in house-building remained softer than on average in 2018.
"Reduced workloads led to more cautious recruitment strategies and the non-replacement of departing staff in May," IHS Markit said.
Construction accounts for 6% of Britain's economy, which has relied heavily on spending by consumers to offset the drag on corporate activity caused by the lack of clarity over the country's delayed departure from the European Union.
Figures published earlier on Tuesday showed the biggest annual fall in retail sales since at least 1995, however, excluding distortions caused by the timing of Easter.
Adding to signs of a loss of momentum in the economy, a PMI published on Monday for Britain's manufacturing sector was the weakest in almost three years.