The UK construction industry has suffered its worst contraction in seven years in June as the sector was rocked by uncertainty over the outcome of the Brexit vote.

Housebuilding shares have fallen today as sentiment was dented by the closely-watched Markit construction PMI index’s reading of 46 in the run-up to the EU referendum, down from 51.2 in May. Only a reading above 50 indicates growth.

The sharp contraction was driven by a ‘steep decline’ in housebuilding and the first fall in commercial construction work since May 2013.

It also revealed the sharpest drop in new business volumes since December 2012 amid mounting uncertainty surrounding Britain’s vote on the European Union.

However, the majority of the responses were collected between June 13 and 29, before the result of the referendum was revealed. The survey said that 80 per cent of the responses had come in before the vote.

On the FTSE 100, housebuilders have fallen as they bear the brunt of the survey. Shares in Persimmon were off 4 per cent, or 57p, at 1,483p, Barratt Developments fell 3.6 per cent, or 15p, at 400.2p, Taylor Wimpey has lost 3.3 per cent, or 4.6p, at 134.6p and Berkeley Group was down 2.9 per cent, or 77p, at 2,577p.

The pound was level against both the US dollar and euro at 12.30pm.