Cranes (2)

Activity in the UK's construction industry declined at its fastest rate since 2009 following the result of the EU referendum, according to a closely watched survey.

The Markit/CIPS purchasing managers' index (PMI) score dropped to 45.9 in second quarter on 2016, down again on June's result of 46. Any figure below 50 indicates contraction in the industry.

Markit said there had been "a clear loss of momentum since the second quarter of 2016".

Most analysts expect the economy to worsen following the Brexit vote, and while some areas have seen better-than-expected figures, news of a quickly declining construction sector will do little to boost confidence in a Brexit Britain economy.

Yesterday, Markit released its PMI for the manufacturing sector - another gloomy post-referendum outlook, depicting its worst performance for three years. And on Wednesday, Markit will release its latest results for the all-important services sector, which accounts for around 75% of UK GDP.

The construction report said: "Anecdotal evidence suggested that economic uncertainty following the EU referendum was the main factor weighing on business activity in July, especially in the commercial building sector.

"UK construction firms frequently cited ongoing economic uncertainty as having a material negative impact on their order books," said Tim Moore, author of the report.

"In particular, survey respondents noted heightened risk aversion and lower investment spending among clients, notwithstanding a greater number of speculative enquiries in anticipation of lower charges."

Despite the overtly negative painting, Markit's report suggested that there is still demand for the latest works or art. It said that construction firms had highlighted demand as being more resilient to the turmoil than expected.

But Samuel Tombs from Pantheon Economics said firms will remain "reluctant to commit to major capital expenditure for a long time to come".

He said: "Meanwhile, the public investment plans won't be reviewed until the Autumn Statement at the end of the year and most major construction projects have long lead times. So it's hard to see the construction sector escaping its recession within the next year."