United Kingdom construction activity slows for second consecutive month

British Foreign Secretary Jeremy Hunt

British Foreign Secretary Jeremy Hunt

The Nikkei India Manufacturing Purchasing Managers Index, or PMI, fell to a six-month low at 52.6 in March from 54.3 in February, IHS Markit, a London-based global information provider that compiles the index, said on Tuesday.

Business activity dropped to its lowest point in the commercial sector since March 2018, the survey reveals, with most of the blame being placed at the door of Brexit-triggered uncertainty about the United Kingdom market outlook.

"A drop in service sector activity indicates that UK GDP contracted in March, with the economy stalling over the first quarter as a whole and at risk of sliding into a deepening downturn in coming months".

"Both total new orders and export sales are now falling at rates not seen since the global financial crisis, with more and more firms reporting lower demand linked to Brexit, trade uncertainty, troubles in the automotive industry and generally softer global demand", said Phil Smith of IHS Markit.

The decline in construction activity represents the first back-to-back fall in output levels since August 2016, just after the Brexit referendum.

"Furthermore, strong competition for contracts was also reported by some panel members".

"The outlook was underwhelming by historical standards, with the unsettled political and economic environment keeping business confidence below its long-run average".

Prices charged increase at the slowest pace since June 2017.

"Nevertheless, UK construction businesses ramped up their purchases of materials and other inputs, reflecting efforts to build safety stocks ahead of any potential Brexit-related disruptions".

"As such, supply chain constraints persisted and average input lead times lengthened once again", Mr Hayes added.

The prospect of a no-deal chaotic exit from the European Union is still a very real possibility as MPs squabble over which form of Brexit to pursue.

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