What's going on?

Friday was a day of bad news for the UK construction industry: the third quarter was its weakest in four years! Also, SIG, a British building materials company, saw its stock fall 20% after saying it would make much less money than expected this year.

What does this mean?

While other industries seem to be holding up all right, construction in the UK appears to be suffering from the Brexit vote: industry volumes fell by over 1% in the third quarter versus a year ago. Unsurprisingly that contributes to a weaker environment for companies that supply the industry: SIG joins other construction suppliers like Wolseley and Travis Perkins that are taking a substantial hit to profits as a result of the recent slowdown.

Why should I care?

The bigger picture: The pain might start to abate soon.
September was better than July and August, and recent survey data suggests construction output also ticked up in October. This won�t be enough to alleviate the immediate concerns for the companies affected, but there looks to be some light at the end of the tunnel. Unless, of course, continued Brexit-induced uncertainty de-rails a recovery.


For markets: UK focused companies are most at risk of a slowdown.
Many companies that are traded on the London Stock Exchange do most of their business abroad � and have consequently seen their share prices soar as the value of the pound has dropped in the wake of the Brexit vote (because international profit is now worth more in pound terms). However, there are plenty of companies that are heavily dependent on the domestic UK economy � and they�re having a much harder time of it (as evidenced by the stock prices of construction suppliers). Despite the UK economy holding up better than expected, there has almost certainly been a negative impact from Brexit for some UK companies.