‘Dire’ UK outlook as builders become latest sector to feel pain of Brexit fears

BUILDERS are feeling the pain of Brexit. The construction sector, 6% of the UK economy, shrank last month at the sharpest pace since April 2009. That means job losses and maybe profit warnings from listed construction firms.

The IHS Markit/CIPS UK Construction Purchasing Managers’ Index fell to 43.3 from 45.0 in August, far worse than expected. Any figure below 50 indicates a contraction. The figures come on top of bad news from the manufacturing sector yesterday. Numbers for the services sector, by far the biggest part of the economy, are out tomorrow.

If they are also bad, that will strongly increase the chances of the UK falling into a recession.

Howard Archer at EY Item Club said the news was “dire”. He added: “The forward looking indicators of the survey offer little — if any — foundations on which to build hopes that the sector is headed for better times any time soon.”

Joe Hayes at IHS Markit, said: “The UK construction sector remained mired in a downturn at the end of the third quarter. Activity is being pulled down at its second-fastest clip for over a decade as firms are buffeted by client hesitancy, heightened Brexit uncertainty and a weak outlook for the UK economy.”