UK construction output falls as infrastructure activity weakens

UK construction activity declined sharply in February, according to the Office for National Statistics on Friday.

Output in the construction industry in February unexpectedly fell 1.7% on a seasonally adjusted basis, when the consensus estimate had been for a 0.1% increase.

January's output data was revised to 0.0%, with the original reading having shown a dip of 0.4% after a 1.8% rebound in December from a drop of 0.8% in November.

Year-on-year, output rose only 0.5% in February, down from the revised 2.3% increase in January and well short of the 1.9% consensus forecast.

On a three-month basis, construction output grew for the fourth consecutive period, by 1.5%.

Infrastructure provided one of the main downward pressures on output in February, decreasing by 7.3% after strong growth in January, while residential building also contributed to the overall monthly decrease, falling month-on-month by 2.6%.

Stronger repair and maintenance was not enough to offset this, with an increase of 1.2% month-on-month.

On Tuesday, more timely data from Markit/CIPS showed their UK construction purchasing managers' index fell to 52.2 for March from 52.5 in February, also short of forecasts. A PMI index reading above 50 indicates growth.