The snowstorm that hit Britain at the end of February and the beginning of March contributed to the fastest decline in construction activity on a monthly basis since the Brexit referendum in June 2016. Unusually bad weather led to a decline in the PMI in construction from 51.4 points in February to 47.0 in March, according to the latest IHS Markit study. A level above 50 is an indicator of growth in the sector, and below 50 means shrinking.
The level in March was the lowest since July 2016, and for the first time PMI fell below 50 in the past six months. The analysts forecast the benchmark to reach 50.9 points in March.
The construction industry in the UK, which accounts for about 6% of the country’s economic growth, is expected to suffer more severely from the snowstorm compared to the rest of the economy. The sector often requires outdoor work, which was frozen due to bad weather.
However, the respondents expect the fall in March to be temporary. The employment growth accelerated and business expectations reached 9-month high, indicating that construction activity will grow in the short term. But respondents noted that demand remains limited due to increased economic uncertainty and unwillingness to risk customers.
The construction sector in the UK experienced difficulties at the end of last year as a number of major infrastructure and business projects were discontinued without new projects to replace them.