UK construction PMI in July posts lowest reading since June 2009, confirms clear loss of momentum after Brexit

In a report released by market research firm Markit and the Chartered Institute of Purchasing & Supply (CIPS), UK construction purchasing managers' index fell to a seasonally adjusted 45.9 from June’s reading of 46.0. The drop was slightly less than forecasts at 43.8.

U.K. construction sector activity slipped further into contraction in July though new orders decreased at a slower pace. There were also reports suggesting that demand patterns had been more resilient than expected, and some firms linked new enquiries from international clients to exchange rate depreciation.

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.

"There is no doubt that the referendum result has hit business confidence, yet the positive to be taken is that projects are largely being postponed as businesses see how the dust settles, rather than cancelling them altogether,” said Joshua Mahony, of IG.

FTSE 100 falters as UK construction shrinks at fastest pace in seven years after Brexit vote, while the pound edges above $1.32 against the dollar on better-than-expected construction data. GBP/USD was up 0.45 percent on the day, trading at 1.3234 at around 10:00 GMT.