Housebuilders’ share prices drop after “dire” construction data released
UK housebuilders' share prices fell this morning after the publication of data showing construction activity fell ahead of the Brexit vote.
In afternoon trading Barratt Developments' share price was down 4.19 per cent, Persimmon's fell 4.94 per cent, Berkeley Group's share price fell 4.41 per cent and Taylor Wimpey's share price was down 4.59 per cent.
Commercial real estate developer British Land's share price fell by 5.23 per cent, and Land Securities' share price was down 5.63 per cent.
The falls come after figures showed construction output plummeted in June while companies put off projects due to uncertainty over the outcome of the EU referendum. The purchasing managers' index (PMI) for the sector came in at its worst level for seven years, falling from 51.2 in May to 46. Scores below 50 represent contraction.
Howard Archer, chief economist at IHS, said:
This is an absolutely dire survey that fuels serious concern over the construction sector. Furthermore, the survey was 80 per cent completed before the UK voted to leave the EU.
The survey can only intensify concern as to just how much the construction sector will be hampered by the Brexit vote.
Markit, which compiled the figures, said there was a "steep decline in residential building".
Housebuilders suffered big losses in the immediate aftermath of the Brexit vote; on the Monday after the result of the EU referendum was announced, several housebuilders triggered the London Stock Exchange's circuit breaker when their share price fell more than eight per cent on its opening price.