Figures are beginning to reveal the effect of Brexit uncertainty on the UK economy. This month, the construction sector experienced its biggest slow-down in new orders since the 2008 global financial crash amidst fears of a No-Deal Brexit on 31 October.
According to IHS Markit/Cips UK construction PMI survey, the index for new work in commercial construction has been in a gradual state of decline since April this year, but slumped dramatically after the government U-turn in Brexit policy over the summer, going from 44.6 in July 2019 to 40 in September. The last time it reached this level was during the UK’s last recession in March 2009.
Duncan Brock from the Chartered Institute of Procurement and Supply (Cips), cited “reluctant clients fearful of taking a wrong turn in a confusing landscape” as the main reason for the slowdown.
His concern were backed up by CEO of the Master Federation of Builders, Brian Berry, who warned that, given the current housing crisis and the key role construction plays in driving the economy through national infrastructure projects, the UK government “certainly can’t afford for building companies to go to the wall due to uncertainty.”
Their calls form part of a growing number of appeals to the UK government to provide greater certainty around the Brexit issue, which is already leading to fluctuations in the value of Sterling.
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