Business

UK construction hit by December snow

Crane in Manchester
Image caption Construction has been slowing down since the summer

The construction industry contracted unexpectedly in December as the snow hit building sites, a survey has found.

It was the first shrinkage in the sector since February, according to the Markit survey of industry executives.

Their UK Construction Purchasing Managers Index fell from 51.8 in November to 49.1 in December - below market expectations of a 50.9 reading.

A level below 50 indicates contraction, which in this case was due in large part to the adverse weather conditions.

"Many constructors indicated that poor weather conditions had negatively impacted on activity," said Markit in its report.

Employment fell sharply in the month, and Markit's researchers noted that some companies said they planned further redundancies.

Decline

But poor weather was only part of the story - the construction index has been in a downward trend since peaking in the middle of last year, led by a particularly pronounced fall in residential building activity.

And despite a moderate pick-up in new construction orders, confidence among the companies surveyed remained relatively weak.

The slowdown in construction may prove significant for the wider UK economy, after an apparent building boom over the summer helped to boost UK growth figures in the second and third quarters of the year.

"Even allowing for the hit to activity coming from December's severe weather, it is very clear that the economy cannot rely on a major contribution from construction going forward," said Howard Archer, economist at IHS Global Insight.

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