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UK construction fell sharply in May Reuters

UK construction output fell sharply in May, adding to concerns that the economy is set to slowdown following the Brexit vote. Output fell by a more-than-expected 2.1% in May compared with the previous month and 1.9% year-on-year, according to figures from the Office for National Statistics (ONS).

This decline comes on top of a 2.8% slide for construction output in April.

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"The fall in May 2016, taken together with the strength of April's figures, continues a longer trend of broadly flat output growth since the start of 2015," said the ONS.

This disappointing data follows a Markit/CIPS PMI survey in June, which showed the steepest contraction of construction activity for seven years.

Markit chief economist Chris Williamson said: "A drop in UK construction output in May adds to what's looking like an ugly run of data for the sector. However, it looks like there's worse to come, possibly much worse.

"The reality of the UK leaving the EU and the associated heightened uncertainty, especially in relation to commercial property and housing investment, is therefore likely to cause further stress in coming months."

IHG chief UK and European economist Howard Archer added: "The construction sector will be hoping that the new government sees increased spending on infrastructure as a way of boosting the economy in the face of Brexit uncertainties, and also magnifies its attempts to boost housebuilding."