Mubasher: The UK construction sector contracted for the second month in a row, as output and new work inflows dropped sharply at the fastest pace since ten years, a survey showed on Tuesday.

The UK construction purchasing managers' index (PMI) dropped to 43.1 last June, compared with 48.6 in May, IHS Markit and Chartered Institute of Procurement & Supply (CIPS) said.

This reading reflected weakness across the whole sector, with home building, commercial construction and engineering activity all dropping last month.

“Delays to new projects in response to deepening political and economic uncertainty were the main reasons cited by construction companies for the fastest drop in total construction output since April 2009,” IHS Markit’s associate director Tim Moore said.

While house building recorded the biggest fall in three years in June, commercial work extended its decline for the sixth month in a row.

New work inflows dropped for the third straight month, which was largely attributed to lack of tender opportunities as political uncertainty fostered a delay to spending plans.

Demand for construction workers was resilient to some extent, with a marginal decline in workforce numbers, which was attributed to the non-replacement of voluntary leavers.

Overall business optimism remained subdued, with sentiment hovering near the seven-month low seen last May.

Lower new work inflows resulted in a decline in input purchases, the lowest since the start of 2010.

“A lack of clarity from policymakers has amplified the poor performance in June,” CIPS’ group director Duncan Brock said.

“Swift decision-making and a break in the political impasse hold the key to pulling the construction sector out of the quicksand,” he noted.

By 9:26 am GMT, the GBP/USD pair fell by 0.26% to $1.2608, while the EUR/GBP pair climbed by 0.32% to GBP 0.8957.