Business

UK Construction output falls as 'Beast from the East' hits sector

DROP...UK construction output fell last month at its sharpest pace since July 2016

A COMBINATION of inclement weather, rising costs and Brexit uncertainty has contributed to the sharpest drop in construction output in almost two years.

The latest Markit/CIPS UK Construction purchasing managers' index (PMI) for March has revealed a fall from February and the biggest drop in activity since the landmark EU referendum vote.

The bouts of heavy snow took its toll on civil engineering work, which experienced its steepest fall for five years, while the disruptive conditions also hit the wider sector, with site activity and access to staff being hampered by the weather.

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

"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."

"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," he added.

Raw material costs increased in March according to the figures, mainly due to the higher price of metals and insulation, though the overall rate of input cost inflation softened to a 20 month low.

The Federation of Master Builders (FMB) chief executive, Brian Berry added:

"The cold snap impacted on a broad array of construction projects, including house building, domestic refurbishment and large civil engineering projects. Many small builders across the country were forced to close sites for more than a week and some employers reported that it was too cold to lay bricks.”

“Alongside the snow, the cost of doing business is rising for the UK's construction firms. Wages and salaries are all rocketing because of the ever worsening skills shortages in construction. What's more, material prices have been rising steadily since the depreciation of sterling following the EU referendum."

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