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UK construction sector hit by February rain UK construction sector hit by February rain
(35 minutes later)
Construction work in the UK was hit harder than expected in February by the strong winds and heavy rainfall which caused severe flooding, dampening the economy's growth prospects overall.Construction work in the UK was hit harder than expected in February by the strong winds and heavy rainfall which caused severe flooding, dampening the economy's growth prospects overall.
Output in the construction sector fell by 2.8% or £270m compared with a month earlier according to the Office for National Statistics. It was the sharpest fall since November 2013 when the industry was hit by a shortage of bricks, and was a much bigger fall than the 1.3% dip in output predicted by economists. Output in the construction sector fell by 2.8% or £270m compared with a month earlier according to the Office for National Statistics. It was the sharpest fall since November 2013 when a shortage of bricks affected the industry, and a much bigger drop than the 1.3% dip in output predicted.
"The exceptionally wet weather rained on the parade in February," said Rob Wood of Berenberg."The exceptionally wet weather rained on the parade in February," said Rob Wood of Berenberg.
The weakness affected both new work and repair and maintenance, and dragged down the annual growth rate in construction output to 2.8% from 5.7% a month earlier.The weakness affected both new work and repair and maintenance, and dragged down the annual growth rate in construction output to 2.8% from 5.7% a month earlier.
New housebuilding in the private sector fell by 6.3%, the sharpest drop since March 2013 when UK construction work was disrupted by heavy snowfall. New housebuilding in the private sector fell by 6.3%, the sharpest drop since March 2013 when heavy snowfall affected UK construction.
Economists said that a rebound in construction activity was likely in March as the weather improved and amid a rising housing market and businesses investment intentions. Economists said that a rebound in construction activity was likely in March as the weather improved and amid a rising housing market and business investment.
"Clearly the damage caused by the floods will need to be repaired, so is likely to generate a boost in construction activities in coming months – every dark cloud has a silver lining," said Alan Clarke of Scotiabank."Clearly the damage caused by the floods will need to be repaired, so is likely to generate a boost in construction activities in coming months – every dark cloud has a silver lining," said Alan Clarke of Scotiabank.
He said the real test would be whether supply could keep up with demand in the housing sector, which has risen in recent months partly as a result of the government's help to buy mortgage scheme. He said the real test would be whether supply could keep up with demand in the housing sector, which has risen in recent months partly as a result of the government's Help to Buy mortgage scheme.
"Clearly bottlenecks became evident in November. And when demand exceeds supply – you typically see price rises," Clarke said."Clearly bottlenecks became evident in November. And when demand exceeds supply – you typically see price rises," Clarke said.
Before the construction data were published economists estimated the economy was on course to grow by as much as 1% in the first quarter, following 0.7% growth in the fourth quarter of 2013. Expectatations were scaled back on Friday following the ONS data to growth of around 0.8% between January and March. Before the construction data was published economists estimated that the economy was on course to grow by as much as 1% in the first quarter, following 0.7% growth in the fourth quarter of 2013. Expectatations were scaled back on Friday to growth of around 0.8% between January and March.