Construction industry battered by cold weather as output contracts

● Employment figures and lower raw material costs more positive signs

Britain’s construction sector has taken a battering from the recent winter weather, triggering a contraction last month, though there was some brighter news on the employment front.

The latest purchasing managers’ index from Markit/cips, published yesterday, revealed a reading of 47 for March, down from 51.4 in February, with economists expecting a figure of 51. Any result above 50 denotes growth.

The bouts of heavy snow and frozen conditions took their toll on civil engineering work, which experienced its steepest fallforfiveyears.thecoldsnap also hit the wider construction sector, with site activity and access to staff being hampered by the weather.

The report comes after separate figures from the manufacturing sector on Tuesday showed activity weakened in the first quarter to its lowest level in a year. Key service sector data was due to be published today.

Tim Moore, IHS Markit associate director, said a jump in employment ensured it was not all doom and gloom for the construction industry last month.

He said: “The construction sector continued to experience subdued business conditions during March, but snow-related disruption was a key factor behind the marked decline in activity on site reported by survey respondents.

“Total construction output fell at the fastest pace since 0 House building activity increased slightly during March, although the rate of expansion was still softer than at any time in 2017, according to the findings of the latest purchasing managers’ index study July 2016, driven by the sharpest reduction in civil engineering activity for five years and a renewed fall in commercial work.

“House building increased slightly during March, although the rate of expansion was still softer than at any time in 2017.

“A solid rise in employment numbers and the rebound in business expectations to a nine-month high provide an indication that construction activity will strengthen over the near-term.”

Blane Perrotton, managing director of national property consultancy and surveyor Naismiths, said: “On this evidence the construction industry isn’t just slowing, it’s seizing. This is the sharpest fall in activity since the Brexit referendum. “February’s gentle uptick in activity proved fleeting as both the weather and sentiment iced over in March.

“Even though the pendulum is now firmly back into negative territory, there are still traces of momentum. Housebuilders continue to buck the trend, even if the residential sector’s strength is no longer able to provide a ‘get out of jail’ card for the industry as a whole.

“Yet for all the grimness of the headline figures, there are some welcome signs too. The resurgent pound has helped bring down the cost of imported raw materials, easing the pressure on margins.”