"The data leave us scratching our heads, as surveys and anecdotal evidence from the sector point to booming business conditions. There's a strong likelihood that either these latest number will get revised higher or that June will see a strong rebound"
- Chris Williamson, chief economist at Markit
U.K.'s construction sector experience the sharpest slowdown for more than a year as housebuilding activity stalled in May, suggesting the U.K.'s economy may have lost some steam in the second quarter. Construction output declined as much as 1.1% in May compared to the month earlier, when it climbed 1.2%, the Office for National Statistics said. Analysts, however, had expected a rise of 0.9%. From the previous year construction advanced 3.5%, the weakest level since November 2013. New work and repair and maintenance both slid 1.1 percent in May from April, which contributed to the negative data. The construction sector accounts for 6.3% of the economy.
The data follows the report earlier this week, which showed industrial production fell 0.7% in May. While the two indicators suggest a slowing activity in the sectors, other data have remained strong. Jobless rate declined to the lowest level in more than five years in April and the National Institute of Economic and Social Research projects gross domestic product grew 0.9% in the second quarter, the fastest since 2010. In order to boost construction and contain surging house prices, U.K. Chancellor George Osborne articulated in June 'revolutionary reforms' to urban planning in order to increase the amount of new housing to cool down increasing house prices.
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