British business activity sank in July to its lowest level since April 2009, a survey showed Friday in the first indication of economic contraction since the shock EU exit vote.
The preliminary composite purchasing managers’ index (PMI) by the research Markit group sank to 47.7 points in July, down from 52.4 in June.
A reading under 50 indicates contraction in private sector activity.
The survey — regarded as a key early indicator of economic activity before official statistics are published — is the first major evidence of economic fallout after Britons voted to leave the European Union in a referendum on June 23.
“July saw a dramatic deterioration in the economy, with business activity slumping at the fastest rate since the height of the global financial crisis in early-2009,” said Chris Williamson, chief economist at Markit.
“The downturn, whether manifesting itself in order book cancellations, a lack of new orders or the postponement or halting of projects, was most commonly attributed in one way or another to Brexit.”
Markit added that the survey signaled a 0.4-percent contraction in the British economy in the third quarter, or three months to September.
“Much of course depends on whether we see a further deterioration in August or if July represents a shock-induced nadir,” added Williamson.
“Given the record slump in service sector business expectations, the suggestion is that there is further pain to come in the short-term at least.”
Markit added the survey showed that the economy had “opened the third quarter on a weak footing”.
Output and new orders fell in both the manufacturing and service sectors during July.