Construction sector contracts in March after 'Beast from the East' blow

Output in the UK construction sector has taken a battering from Britain's freak cold snap, causing the industry to contract in March.

The Markit/CIPS UK Construction purchasing managers' index (PMI) sunk to 47.0 last month, down from 51.4 in February, with economists expecting a figure of 51.0.

A reading above 50 indicates growth.

The bouts of heavy snow took its toll on civil engineering work, which experienced its steepest fall for five years.

The disruptive conditions also hit the wider sector, with site activity and access to staff being hampered by the weather.

Sterling was up versus the US dollar at 1.407 dollars following the update. Against the euro, the pound was marginally lower at 1.14.

It comes after separate figures from the manufacturing industry on Tuesday showed activity weakened in the first quarter to its lowest level in a year.

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

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 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."