UK construction output falls in June

House under contructionImage copyright

UK construction output has fallen in June but there is “little anecdotal evidence” to suggest that the referendum has had an impact, the Office for National Statistics says.

Output fell by 0.9% in June compared with May.

Between April and June it fell by 0.7% compared with the first three months of the year.

The release mainly covers the period in the run up to the referendum, which was held on 23 June.

An influential survey released last week, the Markit/CIPS purchasing managers’ index (PMI), indicated that activity in the construction industry also fell in July, confirming “a clear loss of momentum since the second quarter of 2016”.

However it suggested that the Brexit vote was the main factor weighing on activity.

Brexit latest: housing and construction

“The downturn looks set to deepen in the third quarter,” said Samuel Tombs from Pantheon Economics.

“Meanwhile, Brexit negotiations will be protracted, so businesses will hold off committing to major capital expenditure for a long time to come,” he added.

“In addition, the public investment plans won’t be reviewed until the Autumn Statement at the end of the year and few construction projects are genuinely ‘shovel ready’.

“Accordingly, we continue to think that a slump in construction activity will play a key role in pushing the overall economy into recession over the coming quarters.”

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