Construction industry frozen by 'beast from the east'

Biggest slowdown since Brexit vote shows overall UK economic activity slumped in March

Heavy snowfall from the “beast from the east” caused Britain’s construction industry to grind to a halt last month, according to an industry survey showing the biggest fall in activity since immediately after the Brexit vote.

Confirming fears that freezing weather across the country last month would harm the economy by forcing diggers and cranes to fall idle, the closely watched Markit/Cips UK construction purchasing managers index showed the industry contracted in March.

The barometer of economic activity slumped to 47.0 last month from 51.4 in February, placing the industry below the 50-point mark separating growth from contraction, missing a forecast of 50.8 by economists in a Reuters poll.

Duncan Brock of 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.”

The troubles caused by the snow had a particularly heavy impact on civil engineering projects, according to the survey of more than 170 construction firms, which is watched by the Bank of England for hard facts on what is happening at grass roots level in the economy.

The fall in civil engineering activity, which includes work on roads and bridges, suffered the biggest monthly downturn in five years. Commercial activity also declined, although there was better news from housebuilders, who reported a marginal increase in activity last month. Still, the overall deterioration in new orders was the sharpest since July 2016, just after the EU referendum.

Despite the downturn, employment growth accelerated to a three-month high as builders take on more staff for forthcoming projects.

The latest reading from the construction industry also comes after the manufacturing sector shrugged off the worst of the bad weather with an unexpected increase in activity last month. Howard Archer, chief economic adviser to the EY Item Club, said there were potentially greater problems ahead as significant Brexit uncertainty meant firms had become more averse to taking risks, as well as weighing down on the willingness of some firms to commit to new work.