Construction activity shrinks in March after unusually bad weather, says IHS Markit, CIPS UK construction PMI
Activity in the construction sector was chilled in March due to “unusually bad weather”, according to the IHS Markit/CIPS UK construction purchasing manager’s index out this morning.
Growth slowed from a reading of 51.4 in February to 47 in March, signalling the first time industry activity fell below the 50 no-change marker for six months.
The latest reading also marked the “fastest overall decline” in construction output since July 2016, according to the update, as the weather dampened overall activity and stretched out delivery times.
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The Beast from the East caused disruption across the UK, bringing snow and ice at the beginning of last month.
Where a drop in work was reported, survey respondents said that unusually bad weather had been a disruption to staff availability and activity on site.
Tim Moore, associate director at IHS Markit 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 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.
Moore said that a solid rise in employment numbers and a rebound in business expectations to a nine-month high indicates that construction activity will strengthen over the near-term.
However, respondents to the latest survey said underlying demand “remains constrained” by heightened economic uncertainty and risk aversion among clients.
Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “It’s a few years since the UK experienced such bad weather in March and it’s obvious that supply chains were woefully unprepared to deal with the disruption.
“So though March’s figures could be viewed as a temporary blip, without a strong pipeline of work, and strong risk strategies in place, the sector’s health remains in question as we’re still a long way off seeing it operate the way it has over the last year.”
As well as the surprise severe bad weather, EY Item Club’s chief economic adviser Dr Howard Archer said it was “very possible” that activity could have been hit by fall-out from the collapse of Carillion at the beginning of the year.
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