U.K. Construction Slumps as Brexit Puts Brakes on Investmentby
Slowest growth in almost three years in April, PMI shows
Follows data on Tuesday showing manufacturing sector shrank
U.K. construction grew at the weakest pace in almost three years in April and confidence fell, according to Markit Economics.
Markit’s Purchasing Managers Index dropped to 52 from 54.2 in March, far below the 54 reading forecast by economists in a Bloomberg survey.
The weak reading follows a slump in Markit’s manufacturing gauge on Tuesday, which plunged below the 50 level that divides expansion from contraction. The data raised concern that Britain’s June 23 vote on its European Union membership is holding back growth. Economists predict a deceleration this quarter after a 0.4 percent expansion in the first three months of the year.
“The first quarter slowdown is unlikely to prove temporary,” said Tim Moore, an economist at Markit in London. Weaker growth and EU uncertainty “appear to have provided reasons for clients to delay major spending decisions until the fog has lifted.”