U.K. construction sector likely contracted in August, albeit at slower pace

Post the Brexit vote and under the uncertainty climate, the U.K. business investment and property stand out as the areas that have been impacted. The construction PMI for the nation had fallen sharply in June to 46 from 51.2 in the prior month. However, it dropped just a bit in July to 45.9. It appears that the gloom is overdone, noted Societe Generale in a research report.

Admittedly, the house builders of U.K. are recorded resilient customer interest and anticipate demand to increase in autumn. The housing construction component of the construction PMI was up in July to 45.7 from June’s 43.8, and there is a potential for additional gains.

“We are less sanguine about commercial construction, given the cautious attitude that companies are taking on investment, though. Overall, the construction PMI should manage an increase to 47.5”, added Societe Generale.