Growth in Britain's construction firms fell unexpectedly to a one-year low in August, hit by an investment slump in the commercial sector as Brexit uncertainty weighed on the economy, a survey showed on Monday. David Pollard reports.
They say location is everything. For the UK right now, it's not quite what it was. A little over a year after Britain's vote to leave the EU, construction growth marking its own anniversary with a one-year low in August. Survey compilers IHS Markit talk of a slump in investment pushing the PMI reading - at 51.1 - closer to the 50 that denotes stagnation. And point the finger at Brexit uncertainty. The numbers come just days after the third round of UK-EU Brexit talks ended with little progress. Amid a standoff over just how much the UK should pay the EU as a so-called divorce settlement. (SOUNDBITE) (English) THINK MARKETS, CHIEF MARKET ANALYST, NAEEM ASLAM, SAYING: "If you look at the Brexit negotiation itself I think unless we are over this hurdle of paying the bill there will be no more negotiation. And then the major thorny points, they are still going to be very much on the table unless either side show some sort of flexibility which we don't see it for the time being." Construction, manufacturing - despite its relative strength - and exports failing, say analysts, to compensate for a slowdown in consumer spending. For a teetering UK economy. (SOUNDBITE) (English) BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM, SAYING: "The consumer keeps consuming, to some extent the businesses keep investing and employing, and if you like the show stays on the road. But you'd have to say relative to economic momentum, you know there is a slowdown in place in the U.K." Civil engineering was broadly flat. And commercial construction contracted at its fastest pace since July of last year. Housebuilding was the only sector to see significant expansion. Though there too analysts warn a pullback in house prices in some areas - including traditional London hotspots - could mean another hit to the sector.