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UK construction has worst month in 10 years as Brexit bites -PMI

LONDON, July 2 (Reuters) - Britain's construction industry suffered its worst month in more than 10 years in June as the Brexit crisis put companies off long-term investment, a survey showed on Tuesday, adding to signs of a slowdown in the British economy overall.

The IHS Markit/CIPS construction Purchasing Managers' Index (PMI) plunged to 43.1, the lowest reading since April 2009 when the country was gripped by the global financial crisis.

Economists polled by Reuters had expected the index to improve to 49.3 from May's 48.6.

"Worrying signals from the survey's forward-looking indicators make it almost impossible to sugarcoat the construction PMI data in June," Tim Moore, associate director at IHS Markit, said.

"In particular, new orders dropped to the largest extent for just over 10 years, while demand for construction products and materials fell at the sharpest pace since the start of 2010."

The hit was felt across the breadth of the sector: homebuilding shrank for the first time in 17 months, commercial work fell for the sixth consecutive month and civil engineering contracted by the most since October 2009.

The survey pointed to only a marginal fall in workforce numbers, however, and some firms said they retained staff in anticipation of a recovery in sales.

Construction accounts for 6% of Britain's economy, which has relied on spending by consumers to offset the drag on corporate activity caused by the lack of clarity over the country's delayed departure from the European Union.

Britain has secured an extension of the Brexit deadline to Oct. 31 but both candidates to replace Theresa May as prime minister say they are prepared to take the country out of the EU without a transition deal if necessary.

On Monday, a PMI for Britain's manufacturing sector -- which represents 10% of the economy -- also showed a fall in activity in June as the slowdown in global demand for exports added to Brexit worries. Credit figures from the Bank of England revealed the slowest growth in borrowing in five years.

A PMI for Britain's dominant services sector, which is due to be published on Wednesday, is expected to show only marginal growth in June, according to economists polled by Reuters.

- Detailed PMI data are only available under license from IHS Markit and customers need to apply for a license.

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For further information, please phone IHS Markit on +800 6275 4800 or email (Reporting by William Schomberg; Editing by Catherine Evans)