Britain’s building and manufacturing sectors both contracted in March, according to official statistics, providing more evidence that the economy has made a weak start to 2018.
The construction sector contracted at the sharpest rate for just over five years during March, with output falling by 2.3 per cent as poor weather crimped an already struggling industry. Manufacturing output fell by 0.1 per cent compared with the previous month as both domestic and export orders fell, the Office for National Statistics said.
The UK’s trade deficit narrowed by £700m in the three months to March, but this was due to a fall in imports, mainly of machinery and transport equipment such as ships and aircraft, rather than an increase in exports. “Despite the narrowing in the UK’s trade deficit in [the first quarter], with the construction sector in recession and manufacturing output slowing, this is further confirmation that the UK’s economic performance in the opening months of 2018 has been underwhelming,” said Suren Thiru, head of economics at the British Chambers of Commerce.
The figures follow growth and inflation data that suggested the UK economy lost momentum in the first three months of the year as lower global growth and snow hurt an economy that was already growing more slowly than many of its peers.
Thursday’s data showed all types of construction work declined during the month including housebuilding, which had been a rare bright spot for the industry as commercial work and infrastructure work decreased — housebuilding dropped by 1.5 per cent compared with the previous month. Britain’s construction sector, which accounts for about 6 per cent of the economy, has struggled as a number of big projects have come to an end without being replaced by new work.
In March builders were also hampered by poor weather, which made working outside difficult. The ONS said they had received “some anecdotal information” that the bad weather had hurt businesses in February and March.
But construction figures are often volatile and change as more businesses report their figures to the ONS. Data for January and February, which also pointed to a sharp slowdown, was revised up in the latest figures. The ONS now estimates the construction sector contracted by 2.7 per cent during the first quarter as a whole. It initially estimated it had contracted by 3.3 per cent. The revisions make no difference to overall growth.
Source: Financial Times
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