May 4, 2016 / 8:33 AM / 4 years ago

UK construction output grows at its slowest rate in nearly three years

LONDON (Reuters) - Construction output in Britain grew at its slowest rate in nearly three years in April, a survey showed on Wednesday, suggesting the economy was losing steam before next month’s referendum on whether to remain a member of the European Union.

Construction cranes are seen in Queen Elizabeth Olympic Park in London, Britain, April 26, 2016. REUTERS/Toby Melville

The Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) fell by more than expected to 52.0 from 54.2 in March.

Economists in the Reuters survey had expected the index to fall to 54.0. The lowest forecast in the poll was for a decline to 53.0.

On Tuesday, a Markit survey of Britain’s manufacturing industry showed manufacturing shrank for the first time in three years.

While the rate of new home construction increased in April, growth in commercial property fell to its lowest since July 2013, Markit said.

“Softer growth forecasts for the UK economy alongside uncertainty ahead of the EU referendum appear to have provided reasons for clients to delay major spending decisions until the fog has lifted,” Tim Moore, senior economist at Markit, said.

Britain’s economy slowed in the first quarter of the year as the global economy weakened. Recent surveys have suggested it is losing more momentum as the June 23 EU vote nears.

The Bank of England said in April there were signs that uncertainty around the vote was weighing on investment and commercial property sales.

Economists mostly expect a decision to leave the bloc to deal a blow to the economy, at least in the short term.

The government has taken steps to boost house-building, but critics say more needs to be done to remedy Britain’s chronic housing shortage, which is pushing up property prices.

Markit said new construction orders in April grew at their slowest rate in three years. However, companies hired staff at a faster pace last month than they had in March, when employment in construction was its weakest in nearly three years.

Recent data has suggested Britain’s labour market is losing speed after a strong recovery over the past three years.

Markit’s monthly survey of Britain’s dominant services sector, on which the economy has relied for growth for much of the past year, is due on Thursday.

Reporting by Ana Nicolaci da Costa, editing by Larry King

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