Construction output has seen its first back-to-back contraction since March 2016, as Brexit uncertainty is weighing on building companies as building projects are being delayed.
The Markit/CIPS UK Construction purchasing managers’ index (PMI) saw a reading of 49.7 in March compared to 49.5 in February.
Joe Hayes, economist at IHS Markit, which compiled the survey said, “Fears that the recent weakness of the UK construction sector may not be just a blip, but a sustained soft patch, were further fuelled by latest data.
“Brexit-related uncertainty continued to generate indecisiveness, ultimately hitting order book volumes.
“Furthermore, strong competition for contracts was also reported by some panel members.
“The outlook was subsequently underwhelming by historical standards, with the unsettled political and economic environment keeping business confidence below its long-run average.”
Commercial construction was the worst performing segment as business activity dropped to the greatest extent for the year.
However, residential building was good although materials increased due to Brexit hitting the pound along with a shortage of products.
Hayes added, “UK construction businesses ramped up their purchases of materials and other inputs, reflecting efforts to build safety stocks ahead of any potential Brexit-related disruptions.
“As such, supply chain constraints persisted, and average input lead times lengthened once again.”
On Monday worrying data from the manufacturing sector showed Brexit stockpiling fuelled a surge in output in March.