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Negative June PMI data a “sledgehammer”

The UK construction PMI came in at 43.1 in June, a dramatic drop from the 48.6 recorded the month prior and far off the market expectation of 49.3.

This is the sharpest fall since April 2009, IHS Markit/CIPS says, adding that both house building and commercial building projects fell off steeply  – the former being at its worst level for three years and the latter the most steeply since December 2009 – and that demand for products and materials fell at its most rapid pace since January 2010.

“This is less of a slide than a sledgehammer,” says Naismiths manging director Blane Perrotton. “In an industry that still bears the scars of the crash a decade ago, the news that output is once again falling as fast as it did in the dark days of 2009 will send a chill down many builders’ spines.

“Apart from a brief flurry of stockpiling in advance of March 29th – what should have been Brexit Day – the first half of 2019 has been grim across much of the construction sector.”

Thistle Finance managing director Mark Dyason points the finger firmly at Brexit: “If you want proof that Brexit is hitting builders and developers hard, you’ve just had it, and unequivocally so,” he says.

“Even the one ray of light, residential housing, has been extinguished by the radical uncertainty of Brexit… 2019 is shaping up to be a brutal year for construction, and if the prospects of a no-deal Brexit increase, as appears likely, there is room for further deterioration.”

BLP Insurance director Phil Harris comments: “As the country braces for its next prime minister, the winning candidate must go beyond merely espousing Brexit bluster, and help reinvigorate a stuttering economy.

“After recovering from the economic crash of a decade ago and suffering through three years of Brexit related stagnation, the construction industry needs some positive momentum, decisive action from Whitehall and above all else a degree of certainty.”

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