Britain’s struggling construction sector received another blow in March as bad weather slowed work on building sites and delayed deliveries of materials.
The big freeze, known as the Beast from the East, made it hard for staff to get to work and to do any outdoor shifts if they arrived.
It follows the collapse of Carillion,Britain's second-biggest construction company, which had a knock on effect on subcontractors and on civil building work.
Output fell at the fastest rate for almost two years, according to the purchasing managers’ index (PMI) compiled by IHS Markit.
A score of 50 indicates that output is unchanged on the month, so this fall shows the industry went from a modest expansion in February to a painful slowdown in March.
Civil engineering work fell at its fastest pace in five years, IHS Markit said, while commercial construction also dropped. However, residential building work improved slightly.
The Bank of England has previously warned that the severe cold snap may have knocked 0.1 percentage points off UK economic growth in the first quarter of 2018.
Duncan Brock at the Chartered Institute of Procurement and 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.”
He added: “With the strongest job creation this year, firms had a more hopeful outlook for the coming months coupled with the highest level of optimism since June 2017, as they scoured the wider marketplace for opportunities.”
On top of that, the inflation caused by the fall in the value of the pound pushing up the cost of imported building materials also appears to be dissipating.
Costs rose at their slowest pace in 20 months, the survey found, easing some of the pressures which might have limited the industry’s growth.
Max Jones at Lloyds Bank said: “Construction firms are telling us that work is out there to be won, but they are anxious not to be caught in a race to the bottom, chasing revenue at the expense of higher-margin work. Instead, their focus continues to be on ensuring the robustness of their balance sheets amid greater scrutiny from sector investors.”
He said that the London market, which is "most exposed to Brexit uncertainty", remains "fragile", while other regions are proving more resilient.
"Growth in cities including Birmingham and Manchester is outpacing the wider UK economy, providing a timely boost for commercial contractors and at least in part offsetting weakness elsewhere,” Mr Jones said.
Source: The Telegraph