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UK construction sector hit by February rain UK construction sector hit by February rain
(about 14 hours 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. Heavy rain, strong winds and severe flooding in February took a £270m toll on construction firms, according to official figures.
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. Output in the sector fell by 2.8% compared with January, the Office for National Statistics said on Friday, a bigger dip than the 1.3% expected and the sharpest fall since November 2013, when a shortage of bricks affected the industry.
"The exceptionally wet weather rained on the parade in February," said Rob Wood of Berenberg. Rob Wood, of the private bank Berenberg, said: "The exceptionally wet weather rained on the parade in February."
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 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 heavy snowfall affected UK construction.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 business investment. Economists said a rebound in construction activity was likely in March as the weather improved and amid a rising housing market and growing 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," said Alan Clarke of Scotiabank. The real test would be whether supply could keep up with demand in the housing sector, which had 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. "Bottlenecks became evident in November," he said. "And when demand exceeds supply, you typically see price rises." 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.Angela Monaghan
"Clearly bottlenecks became evident in November. And when demand exceeds supply – you typically see price rises," Clarke said.
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.