UK construction cools in March as housebuilding loses momentum

A slowdown in housebuilding eased growth in Britain's construction sector for the second month in a row in March, a survey reported.

The closely watched Markit/CIPS Construction Purchasing Managers' Index (PMI) fell to 52.2 from 52.5 in February.

Economists had expected the figure to hold steady at 52.5, the rate was also the joint slowest rate of growth since a recent pick-up for the sector began in September following last summer's Brexit vote.

The survey blamed "a loss of momentum in housing activity, which offset a rebound in both commercial and civil engineering activity".

The report follows similarly disappointing results from Markit's manufacturing PMI released yesterday, which also showed an unexpected slowdown.

However, firms questioned in the survey remained upbeat as a "resilient economic backdrop had a positive impact on new invitations to tender".

IHS Markit senior economist Tim Moore said: "UK construction firms experienced a growth slowdown in March, with the loss of momentum centred on housebuilding.

"A weaker trend for residential work has been reported throughout 2017 so far, which provides an indication that the cooling UK housing market has started to act as a drag on the construction sector."

IHS Markit chief UK & European economist Howard Archer added that a number of weaker PMI reports in March pointed to the "suspicion the UK economy is beginning to falter".