Snow ‘stopped play’ in construction, finds PMI

4 April 2018

Snowy weather in March caused the fastest drop in construction activity since 2016, the latest PMI has shown.

Supply chains were “woefully unprepared” for the unusually bad weather, which was the key factor behind the drop in construction output. Snow-related disruptions had a particularly bad impact on civil engineering projects, the report said.

The CIPS/IHS Markit UK Construction Purchasing Managers’ Index (PMI) fell to 47.0 in March, down from 51.4 in February. It is the first time in six months that the index has fallen below the no-change score of 50. The index is compiled through a monthly survey of buyers – a score above 50 represents growth, while a score below indicates contraction.

Duncan Brock, group director of CIPS, said: “Snow stopped play in March, as the unseasonal weather restricted overall activity, lengthened delivery times and triggered the fastest drop in new orders since July 2016.

“It’s a few years since the UK experienced such bad weather in March, and it’s obvious that supply chains were woefully unprepared to deal with the disruptions.”

Brock added that while the March figures could be seen as a “temporary blip”, without a strong pipeline of work or strong risk strategies, the sector’s health remains in question.

While civil engineering and commercial activity was worst hit, housing became the best performer for the month. But growth here was still softer than most of 2017, likely caused by more systemic problems than the weather. Brock said: “Respondents also cited continuing Brexit-related uncertainty and disappointment over performance of the UK economy.”

There was some good news in the sector. Price inflation was the lowest since June 2016 as the impact of the weak pound has largely dissipated, and job creation was the strongest so far this year indicating optimism for the months ahead.

Manufacturing PMI figures for March were also released this week and indicated a steady rate of growth in the sector. The CIPS/IHS Markit Manufacturing PMI increased slightly to 55.1 in March, up from 55.0 in February. Brock said this was “a steady if unremarkable performance”.

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