The activity in UK construction sector slowed in July 2016, as the Purchase Managers Index (PMI) declined for second consecutive month to 45.9 points. The production volume declined during the reported period, but the new orders declined at a slower pace, which gives some optimistic point of view for the economists and analysts. However, data show that this is the sharpest decline since June 2009.
The PMI assessment is the first, based on data only after the referendum for Brexit and confirmed the loss of momentum in the second quarter of 2016, due mainly to the sharp and rapid decline in construction business. The reduced volume of new projects, which are supposed to replace the already completed, contribute to the decline in employment.
The data showed that the manufacturing sector in the UK also slowed sharply after a referendum in which a majority supported leaving the EU. Earlier in July the British statistical office reported that retail sales in June dropped after two consecutive months of growth.
However, the British economy was able to accelerate its growth in the second quarter and recorded an increase of 0.6% on a quarterly basis. On an annual basis the growth was 2.2%.
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