Record downturn for housebuilding sector

By John-Paul Ford Rojas, Business Reporter
Britain's housebuilding sector shrank at its sharpest pace on record at the start of the year, according to official figures.
The 9% downturn was the biggest month-on-month fall shown by data from the Office for National Statistics (ONS) going back to the start of 2010.
It contributed to a bigger-than-expected decline for the wider construction sector, which contracted by 3.4% - the largest since June 2012.The setback is likely to come as a disappointment for ministers seeking to boost the number of homes.There was speculation that the demise of construction giant Carillion may also have hit the figures. The ONS said it could not comment on the impact of individual firms.Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Rising interest rates and Brexit uncertainty are proving to be a toxic combination for the construction sector."Howard Archer, chief economic advisor to the EY ITEM Club, said: "The volatility of this sector suggests some bounceback is likely, although the recent bad weather presents a downside risk."
Official figures also showed the manufacturing sector - which has been buoyed recently by the strength of the global economy and the weakness of the pound - only managed a rise of 0.1%, though it was the ninth month in a row of expansion.GDP grew by just 1.7% last year - the slowest of the G7 advanced economies.The slowdown has been attributed to the Brexit vote, which saw a collapse in the pound, driving up inflation and squeezing household spending, as well as creating business uncertainty seen as weighing on investment.
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However, the Bank of England last month upgraded growth forecasts on account of an improving global economy.The independent Office for Budget Responsibility will see its latest projections published when the Chancellor delivers his spring statement next week.
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