(Bloomberg) --
U.K. construction posted its first back-to-back contraction in 2 1/2 years as builders postponed decisions amid the turmoil over Britain’s departure from the European Union.
IHS Markit’s index of activity for March rose to 49.7 from 49.5 in February. Even so, that’s below the 50 threshold that indicates expansion.
Commercial construction was the worst performing area, while civil engineering remained weak. Input prices climbed to the highest since November, with builders reporting high material costs due to the exchange rate and, in some cases, supplier shortages.
“Brexit-related uncertainty continued to generate indecisiveness, ultimately hitting order book volumes,” said Joe Hayes, an economist at IHS Markit. “Nevertheless, U.K. construction businesses ramped up their purchases of materials and other inputs, reflecting efforts to build safety stocks ahead of any potential Brexit-related disruptions.”
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