Cranes down: Pound falls as UK’s construction output plummets in the first quarter of 2016
If you're a crane enthusiast, look away now: the UK's construction output suffered a shock slowdown in March, official figures have shown, as fears over the referendum began to bite.
The pound was down 0.25 per cent, at 1.4415 against the dollar after the figures, which showed output in the sector fell 1.1 per cent in the first quarter of this year, compared with the last quarter of 2015.
That's higher than the Office for National Statistics' (ONS) previous estimate: as part of GDP figures published in April, it suggested construction output had fallen 0.9 per cent in the first quarter.
Today's figure was broken down into a 0.6 per cent slowdown in new work, alongside a 1.9 per cent fall in repair and maintenance.
Meanwhile, output fell 3.6 per cent between February and March, with both new work and maintenance both falling 3.6 per cent.
"The figures provide yet more evidence that uncertainty about the outcome of the EU referendum is slowing the economic recovery," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
"[However], the construction sector would be slowing even if the referendum was not taking place, due to the intensifying fiscal squeeze.
Public sector construction fell 7.4 per cent month-to-month in March, and infrastructure output — 40 per cent of which is financed by the public sector—fell by 6.5 per cent.
"For now, the one bright spot remains private housing… But the drop in the housing sub-index of the construction PMI to 51.5 in April, from an average of 53.1 in Q1, signals that the housebuilding recovery also is losing pace, as labour shortages bite and, perhaps, Brexit concerns play out too."
That's hardly encouraging stuff for the nation's housebuilders. Experts have already warned about the EU referendum's impact on the UK's construction industry. This morning City PM mapped the potential impact on the City's property sector. Brexocalypse, anyone?