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Bad weather hits UK construction output in February


British construction output shrank in February, as floods and heavy rains in many parts of the country delayed work.

Andrew Yates | AFP | Getty Images

Construction output fell 2.8 percent in February - its biggest fall since November last year - having risen 2.1 percent in January, the Office for National Statistics said on Friday.

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On an annual basis, it rose 2.8 percent in February compared with a 5.7 percent increase in January. Construction accounts for 6.3 percent of British gross domestic product.

An ONS official said there was evidence of some impact from the weather on the construction industry with some work being put on hold and repairs of flood damage had not yet filtered through into the data.

Previously published private sector surveys have shown the construction sector stabilized in March after easing in February.

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The construction sector has benefited from a rebound in the housing market which is showing little sign of letting up.

Demand for property has been buoyed by record low interest rates and government sponsored schemes, underpinning house-building and by extension the construction sector.

With house prices growing at about 10 percent a year, by some measures, the Bank of England has said it is "vigilant" about risks in the property market.

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However, output in the construction sector, which was hammered during the financial crises, is 13.2 percent smaller than its pre-crisis peak.

Construction output grew 0.3 percent in the three months to February, compared with the September-November period boosted by a 1.0 percent increase in new work, the ONS said. The three-month measure gives a smoother reading of the industry than the often volatile monthly changes.

Recent data has suggested that Britain's economy has at least kept up its rapid pace of late last year in the first quarter of 2014.

After releases this week showed stronger-than-expected growth in industrial and manufacturing output in February, some economists predicted growth may have sped up to 1 percent in the first quarter compared with the previous three months.

A preliminary reading of first-quarter GDP is due on April 29.