March data revealed a setback for the UK construction sector following five months of marginal business activity growth. However, survey respondents noted that unusually bad weather conditions had been a key factor behind the drop in construction output, with snow-related disruption having a particularly negative impact on civil engineering projects. Business activity expectations and job creation both picked up in March, which provides a clear signal that construction firms anticipate a rebound in activity during the months ahead.

The seasonally adjusted IHS Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI®) fell sharply from 51.4 in February to 47.0 in March, to register below the 50.0 no-change threshold for the first time in six months. Moreover, the latest reading signalled the fastest overall decline in construction output since July 2016. Where a drop in work was reported, survey respondents noted that unusually bad weather had disrupted staff availability and activity on site.

Duncan Brock, Director of Customer Relationships at the Chartered Institute of Procurement & Supply, said: “There was some good news as purchasing levels increased slightly, sustained by the respite of pressure from cost increases which were the lowest since June 2016 and where the worst impact of the weak pound on prices may have dissipated. With the strongest job creation this year, firms had a more hopeful outlook for the coming months coupled with the highest level of optimism since June 2017, as they scoured the wider marketplace for opportunities.”

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