Unseasonal Weather Combines With “Mad March” Construction Frenzy
The beast from the east played havoc with construction schedules in February, leading to a surge of activity in March and April.
People in the UK are renowned the world over for their love of talking about the weather, so when The Beast from the East blew in over late February, it is little surprise that it dominated the front pages of newspapers and websites.
However, school closures and cancelled sporting events were only the half of it. The weather also played havoc with the UK’s construction sector, just weeks after the industry reported the first signs of economic recovery after months of recession.
The heavy snow and arctic conditions brought construction to a halt across the country, and saw the Purchasing Manager’s Index (PMI) drop to a two-year low of 47.0. However, the positive news is that the belated arrival of spring, along with the traditional March madness on the UK’s roads, has led to a spike in activity, with construction signs visible across the company as contractors rush to catch up.
Year end spending
We see the same pattern every year. As March arrives, local authorities hurry to complete the various road and infrastructure improvements for which they have had money allocated, before the end of the financial year. While some authorities dismiss the “Mad March” phenomenon as a myth, the evidence is there for all to see, particularly this year.
Local routes across the country are littered with temporary traffic lights, and motorways are subject to overnight closures as the highways department furiously tries to make up for lost ground after the time lost in February.
Civil engineering projects delayed
Residential construction works suffered minimal disruption during the cold snap, but the larger civil engineering projects were badly affected, and this is what is believed to have caused the dramatic drop in PMI. Yet as the storm clouds cleared, the sector looked ready to start anew, with construction firms hiring personnel at the highest rate in almost a year.
Implications on the broader economy
There are still more economic questions than answers in the UK construction sector. Already, it has seen a positive spike at the very beginning of the year, followed by a drastic downturn as the weather closed in. Undoubtedly, the figures for March and April will be more positive, but will this be indicative of further recovery that builds on the optimism of previous months, or simply another short term spike as the wintery backlog is cleared?
Only time will tell, but with the whole UK economy resting on a knife edge, there will be no shortage of economic experts and commentators watching closely. The Office for National Statistics will release economic growth figures for the first quarter on 27 April, and the performance of the construction sector will most likely spell the difference between poor and mediocre.
Those figures will in turn be influential on any change in interest rates by the Bank of England. Most expect a small increase to take place in May. There is more than just the health of the construction industry resting on how the sector performs over the coming weeks.