Construction industry in the UK shrank in May

Construction_industry_in_the_UK_Shrank_in_May

The construction industry in the UK shrank in May by 2.1% MoM, according to the National Statistics Office cited by Reuters.

The decline almost entirely erases the increase in April, which was 2.8%.

The construction, which generates 6 percent of the gross domestic product (GDP) of the country will have to record an increase of 1.9% in June not to weigh on economic growth, stated experts from the Statistical Office. Such development, however, is unlikely given the already published private studies showing that the sector shrank in June, as well.

Economists polled by Reuters had expected the decline to amount to 1% in May.

The result of the referendum in the UK on 23 June triggered fears of a recession and led to great uncertainty about future trade relations between the United Kingdom and other countries.

On an annual basis, the construction sector contracted by 1.9% amid forecasts for a fall of 3.5 per cent.

In the first quarter economic growth in the UK slowed to 0.4% on a quarterly basis.

Private company Markit reported last week that activity in the UK construction sector has slowed to a 7-year low. Purchasing Managers’ Index (PMI) fell from 51.2 points in May to 46 points in June, the lowest level since 2009. Any value above 50 talks about expansion in the sector, while below 50 points – shrink.

In housing, the decline is 3.2% in May. From the beginning of the year, the index recorded an increase only in February.

About the Author

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Martina T.
Martina Terzieva is a content writer for Business News Feeds. She likes to dig deep, find the most interesting things that happen and share them with the world. Besides news, Martina writes poetry, she's also a musician and a sound engineer.

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