"The survey results are yet another indicator of the severe underlying fragility across the U.K. construction sector"
- Tim Moore, a senior economist at Markit
The U.K. construction output shrank for the third consecutive month in January, due to weak domestic demand, which was hit by a cold snap that brought snow across the country and created a drag on building projects. The Markit/CIPS Construction Purchasing Managers' Index, which is a gauge of overall output in the sector, stood at 48.7 in January, unchanged from December. Analysts, however, expected some improvement, suggesting a reading of 49.7, which is much closer to the 50 threshold, which separates growth from contraction. Monday's reading is adding to concerns that the U.K. is facing a risk of a triple-dip recession after the contraction in the final quarter of 2012.
"The survey results are yet another indicator of the severe underlying fragility across the U.K. construction sector," said Tim Moore, a senior economist at Markit. "Construction firms reported improved optimism about the business outlook, although much of this appeared to rest on hopes that the chorus of calls for greater public-sector investment spending starts to come to fruition."
"Snowfall at the start of the year may have disrupted output to some degree, but unfavourable weather outside is clearly far down the long list of difficulties afflicting construction companies at present."
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