Growth in Britain’s construction industry ebbed in January to its weakest since icy weather beset the sector last March, as uncertainty around Brexit dragged particularly on commercial building work, a new business survey showed.
The IHS Markit-CIPS UK Construction Purchasing Managers’ Index (PMI) fell in December, below all forecasts in a Reuters poll of economists.
Growth in the housebuilding and civil engineering sectors slowed sharply and activity contracted in the commercial sector for the first time since March, when construction was hit by unusually cold temperatures.
Construction firms hired staff at the slowest pace since July 2016, just after the Brexit referendum, as optimism soured ahead of Britain’s departure from the EU, scheduled in less than two months’ time.
“Delays to client decision-making on new projects in response to Brexit uncertainty was cited as a key source of anxiety at the start of 2019,” Tim Moore, economist at survey compiler IHS Markit, said.
A similar survey of the manufacturing sector also showed a sharp slowdown underway, caused by a cooling global economy as well as Brexit uncertainty.
UK prime minister Theresa May, under pressure from her own Conservative Party, wants to reopen a Brexit treaty with the EU to replace an Irish border guarantee, something the Irish Government and the EU have rejected.
Investors have urged the UK government to ensure an orderly exit from the club it joined in 1973.
The closely watched IHS Markit-CIPS survey of services companies, which accounts for the bulk of private-sector activity, is due later today.
Meanwhile, accountancy firm Deloitte said its survey showed British businesses’ appetite to take on financial risk has fallen to its lowest level in nearly a decade due to fears of “the hardest of Brexits” and rising US protectionism. Brexit was identified as the top risk.
“Corporates are positioned for the hardest of Brexits, with risk appetite at recessionary levels and an intense focus on cost control,” Deloitte’s chief economist Ian Stewart said.
A survey by the Institute of Chartered Accountants in England and Wales also showed falling sentiment, and pointed to weak first-quarter economic growth.
Last week, the main trade body for Britain’s car industry said a no-deal Brexit would cause “permanent devastation”, as carmaker Nissan cancelled its previously announced UK investment.
REF Irish Examiner