Construction falls at the fastest rate in seven years as Brexit slams the brakes on orders

UK construction declined at the fastest rate for seven years as the industry continues to weather Brexit uncertainty, a report said.

The closely-watched Markit/CIPS UK Construction Purchasing Managers' Index (PMI) registered 45.9 in July, down from 46.0 the month before.

A mark below 50 denotes a fall, and this was the second month running construction activity was in negative territory. The fall in July was the fastest overall decline in construction output since June 2009.

The report said: "Survey respondents noted that uncertainty following the EU referendum had dampened client confidence, led to greater risk aversion, and encouraged a wait-and-see approach to decision making."

It said commercial building work endured over a six-and-a-half year drop off in activity, while civil engineering work fell for the first time this year.

Housebuilding also fell in July, but the rate of contraction eased from June's three-and-a-half year low.

Markit senior economist Tim Moore said: "July's survey is the first construction PMI compiled entirely after the EU referendum result and the figures confirm a clear loss of momentum since the second quarter of 2016, led by a steep and accelerated decline in commercial building."

Moore added: "Construction firms generally suggested that clients had adopted a wait-and-see approach rather than curtailed or cancelled forthcoming projects during July. While there is little to suggest an imminent turnaround in business conditions, a relief factor appears to have softened the fall in business optimism among UK construction companies.

Pantheon Macroeconomics chief UK economics Samuel Tombs said: "July's construction PMI indicates that the sector, which entered another recession in the first half of this year, is bearing the brunt of the post-referendum collapse in business confidence."