Construction industry feels chill of 'Beast from the East'

Snow was partly to blame for a sharp decline in the construction industry in February, new figures show.

The sector shrank by 3% compared to the same month last year, the biggest such fall for nearly five years, according to the Office for National Statistics.

Manufacturing also suffered an unexpected drop in output for the first time in almost a year - falling by 0.2% month on month in February - fuelling fears of a slowdown in the wider economy.

The ONS said the decline in construction could be partially explained by the recent extreme weather after some firms reported the "effect of the snow on their businesses in the final week of February".

But it said the drop was driven predominantly by the continued decline in repair and maintenance work.

Economists had expected construction output to bounce back in February - after a 3.1% plunge in output during January.

Construction makes up about 6% of British economic output.

The Bank of England warned last month that its early estimates of the impact of the cold snap from the Beast from the East - which brought the country to a standstill - pointed to an economic growth slowdown to 0.3% in the first quarter.

But it stressed the effect was "likely to be temporary".

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that while the weather took its toll, the construction sector downturn "began a long time before the snow hit".

Last week, separate data from the Markit (NasdaqGS: MRKT - news) /CIPS UK Construction Purchasing Managers' Index also showed a marked slowdown in constuction growth from 51.4 in February to 47 in March. A reading above 50 represents growth.

Housebuilding increased slightly but other sectors suffered, with civil engineering experiencing its sharpest downturn in five years and commercial work seeing its biggest drop in nine years.