UK construction feels chill wind in February

UK construction output sank by 1.6 per cent in February, surprising economists by extending the previous month’s decline.

The pullback, set against the 0.7 per cent rise predicted by economists in a Reuters poll, takes the year-on-year drop to some 3 per cent, deeper than the 2.5 per cent predicted.

These numbers are prone to large revisions, and have likely taken a hit from the blast of snowy weather at the end of the month.

Still, new work in infrastructure shrank by a chunky 9.4 per cent on the month.

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The UK Office for National Statistics points out in its release that this all follows an unusually upbeat end to last year, where construction output reached a record high that was 30 per cent higher than the lowest point in the previous five years.

In an increasingly familiar pattern, housing is a rare bright spot.

Manufacturing

Separately, the UK manufacturing sector’s record-breaking expansion came to an end in February as the sector unexpectedly contracted for the first time in nearly a year.

Output from the sector fell by 0.2 per cent compared to January, the first fall in production since March 2017. According to a poll conducted by Reuters before the data was released. City economists expected growth of 0.2 per cent.

UK manufacturing was bolstered by a combination of a cheaper sterling and stronger global growth last year. However there are signs the global rebound in manufacturing is now losing pace: the UK report follows equivalent data from France, Germany and Italy that have pointed to a similar slowdown in manufacturing in the first few months of 2018. – Copyright The Financial Times Limited 2018