UK construction slumps in May

City A.M. Reporter
British firms built less in May despite an extra working day, official data showed on Friday.

Construction output dropped 6.3 per cent in the month, non-seasonably adjusted data from the Office for National Statistics showed.

Firms failed to benefit from an extra working day in May as a public holiday usually held at the end of the month was postponed until June, with another day added, to celebrate the Queen's Diamond Jubilee.

"As such, caution should be taken when interpreting the monthly movements in affected outputs involving May and June 2012," the ONS said.

Between March and May construction output fell 7.4 per cent compared to the same three months in 2011, with the main drag coming from new public housing work, which plunged by 22.9 per cent.

Construction activity fell at its fastest pace in two-and-a-half years in June, a Purchasing Managers' Survey showed earlier this month, as underlying business conditions worsened and the extra public holiday hit output.

Britain fell back into its second recession in four years at the turn of the year and a recent slew of gloomy data has raised fears that the downturn extended into the last quarter.

The Bank of England last week announced a £50bn top-up to its asset purchase programme in an effort to boost an economy struggling to return to growth.