UK construction battered in June by Brexit fears – Markit

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Britain’s construction industry suffered its worst contraction in seven years in June as concern grew about a referendum on European Union membership, according to a survey that was mostly conducted before Britain voted on June 23 to quit the EU.

Financial data company Markit said on Monday its construction Purchasing Managers’ Index plunged to 46.0 in June from 51.2 in May, its lowest level since June 2009, in what could be a sign of worse to come.

It was the first time since April 2013 the index had fallen below the 50 level that separates contraction from expansion, and sterling GBP= briefly turned negative on the day after the result.

“This is an absolutely dire survey that fuels serious concern over the construction sector … (and) can only intensify concern as to just how much the construction sector will be hampered by the Brexit vote,” Howard Archer, chief UK economist at IHS Global Insight said.

Some investors are already pulling out of commercial property deals in London, though the picture is mixed as the sharp fall in sterling makes the city cheaper for foreigners.

REUTERS