U.K. Construction Industry Nears Stagnation Amid Brexit Worries
(Bloomberg) -- The U.K. construction industry barely grew in January as Brexit uncertainty saw firms hesitate to start new projects.
IHS Markit’s gauge for the sector fell to 50.6 from 52.8 in December, a markedly worse reading than the 52.5 forecast by economists. The drop took the index close to the 50-mark that separates expansion from contraction.
- With less than two months to go until the U.K. leaves the European Union, uncertainty around the shape of the divorce is crimping investment and confidence.
- Brexit was the most-cited concern among survey respondents, Markit said. Clients had a “wait-and-see approach” to spending, leading to softer demand.
- Employment growth in the construction industry fell to a 2 1/2 year low, while new business growth was the lowest in eight months, the survey showed.
- In a separate report published last week, Markit said its gauge of manufacturing fell to a three-month low, and that firms are stockpiling at the fastest pace on record.
- Markit will publish its report on the U.K.’s dominant services sector on Feb. 5, while Bank of England officials are due to announce their latest decision and economic forecasts on Feb. 7.
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