Sector leads post-Brexit slump

The housebuilding sector fell into decline for the first time in more than three years in June, leading to housebuilders’ share prices tumbling following the announcement of the Referendum result.

The purchasing managers’ index (PMI) for the overall con- struction sector recorded its worst level for seven years based on pre-Brexit worries in early June, dropping from 51.2 in May to 46 where a score below 50 marks a contraction.

Markit, which compiles the PMI together with the Chartered Institute of Procurement and Supply, said there had been a “steep decline in residential building,” and major housebuilders’ shares saw substantial falls following the Brexit result (see story on page 5).

Financial analysts offered warnings over the impact of the data,

“This is an absolutely dire survey that fuels serious concern over the construction sector,”

Howard Archer of IHS Global told City A.M. Joshua Mahony at IG commented:

“Many firms have seen investment ground to a halt both before and after the Brexit vote.”

Tim Moore, senior economist at Markit commented:

“The extent and speed of the downturn in the face of political and economic uncertainty is a clear warning flag for the wider post-Brexit economic outlook.”

The London property sector saw Standard Life Invest- ments suspend trading in its £2.9bn UK property fund due to “exceptional market circumstances.” post-Brexit. The fund manager which had not taken the step since the financial crash of 2008 Saudi that investors had been seeking to withdraw money in increased numbers since the vote.