Cold weather sees biggest drop in construction since 2009

The ‘Beast from the East’  cold snap in March saw the UK construction industry experience its biggest drop in activity since the aftermath of 2016’s Brexit vote, according to Reuters.

An industry survey indicated that the snowy weather produced a larger decline than had been predicted (50.8). The IHS Markit/CIPS UK Construction Purchasing Managers Index (PMI) dropped to 47.0, down from 51.4 in February.

The unusual Siberian weather system brough snow, cold wins and the coldest temperatures seen in Britain for several years. It affected much of mainland Europe as well as the UK. House building was little affected but other sectors saw a significant effect.

For civil engineering firms, it was the biggest downturn in five years, with the biggest one-month drop since 2009.

Construction represents around 6% of British economic output but is seen as a guide to investment and sentiment in the rest of the national economy. According to official figures, construction output declined through the last three quarters of 2017. PMI respondents repeatedly said the UK vote to leave the European Union was suppressing new business.

A separate PMI survey showed the bad weather had little impact on manufacturing and that construction is making a rebound in April.

UK construction sector growth fell 3.4% in January

UK construction output fell 3.4% in January 2018 compared to December 2017, the largest monthly decline since June 2012, according to the Office for National Statistics (ONS).

The ONS said that weak growth in the housebuilding sector was the main factor in the low output and that construction remained a ‘weak spot’ for the UK economy. ONS data also showed that manufacturing growth slowed in January and the trade deficit increased.

Construction saw a decline in all new work in January, with the biggest drop in the private housing sector. However, that sector had experienced a record high in December 2017.

Ole Black, senior statistician at ONS said: “Construction continues to be a weak spot in the UK economy with a big drop in commercial developments, along with a slowdown in housebuilding after its very strong end to last year.”

PM Theresa May recently unveiled reforms aimed at boosting housebuilding in England. However, rising interest rates and the uncertainty over the shape Brexit will take are contributing to a sluggish construction sector.

Samuel Tombs, chief UK economist at Pantheon Macroneconomics told BBC News: “The sharp decline in output in January primarily reflected an 8.3% month-to-month collapse in new work in the private housing sector.”

Tombs added that anticipation of further interest rate rises was hampering buyer demand for new homes.

£24m contract for M49 Avonmouth junction awarded to Galliford Try

Highways England has awarded a construction contract for the building of a new motorway junction to Galliford Try, according to Construction Enquirer.

The £24m contract will see the firm construct a new M49 junction near Avonmouth, Bristol. The two-bridge junction design incorporates an existing bridge and adds another bridge directly beside it.

The two bridges will feed into a single roundabout spanning the motorway with new access and slip roads on both sides of the junction, connecting fully with traffic from the north and south.

The aim of the junction is to improve road access and connect into the Avonmouth and Severnside Enterprise Area from the motorway. The initial preparation work is underway, with construction expected to begin in early 2018.

Highways England South West Regional Delivery Director Nick Aldworth said: “The contract announcement represents a major step, ahead of us starting work on a scheme which will bring real benefits to the South West economy.

“We recognise the strategic importance of the Avonmouth and Severnside Enterprise Area as a key regional employment site and that is why we are helping to unlock economic growth in the area by building this new junction. As well as boosting the local economy, the junction will also improve access to the regional road network and relieve traffic on local roads.”