Investing.com - Activity in the U.K. construction sector slowed to a 10-month low in January, as uncertainty over the U.K.'s pending departure from the European Union made builders cautious over new projects.
The report follows a similar one for the manufacturing sector on Friday that also fell short of expectations, and noted that companies were stockpiling at the fastest rate in years to ensure they can keep producing if the U.K. leaves the EU on March 29 without any transitional trading arrangements in place.
Research firm IHS Markit said its construction purchasing managers’ index fell to 50.6 in January, compared to forecasts for a reading of 52.6.
The December reading was 52.8.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
The research firm highlighted that January data pointed to a loss of momentum for the UK construction sector, with business activity growth easing to its weakest for ten months.
“A number of survey respondents noted that Brexit uncertainty had led to hesitancy among clients and a corresponding slowdown in progress on new projects,” IHS Markit said.
Tim Moore, Economics Associate Director at IHS Markit, noted that that “staff recruitment slowed to a crawl in January” with the softest rate of job creation since July 2016.
“Delays to client decision-making on new projects in response to Brexit uncertainty was cited as a key source of anxiety at the start of 2019,” Moore explained.
Over the weekend, Japanese automaker Nissan cancelled a decision to build its new X-Trail SUV at its plant in Sunderland in north-eastern England, citing uncertainty over Brexit as one of its considerations.