The dip in construction output has fuelled fears the UK is heading for a triple-dip recession

Construction slump continues for fifth month

Recent figures have showed construction output shrank in March for the fifth month in a row.

Heavy snowfall and flagging demand hit activity in the construction sector last month, heightening fears the UK is heading for a triple-dip recession.

The latest Markit/CIPS purchasing managers index (PMI) recorded a reading of 47.2 last month for construction output - below the 50 mark which separates contraction from expansion.

Economists said hopes of avoiding another slump into recession are now pinned on Britain's dominant services sector after worse-than-expected PMI figures for the manufacturing sector yesterday, which showed overall activity slumped for the second month in a row.

While March construction output was an improvement on February's 40-month low of 46.8, it remains much weaker than the average reading of 54.

Tim Moore, senior economist at Markit, said weak construction output "leaves the service sector as the last great hope for avoiding another slide in UK gross domestic product".

PMI figures for the service sector, which makes up more than three quarters of the economy, are released tomorrow.

IHS Global Insight economist Howard Archer said: "It seems highly probable that the (construction) sector suffered renewed and appreciable contraction in the first quarter of 2013 after all too rare expansion in the fourth quarter of 2012."

Civil engineering was the worst-performing area of construction in March - recording the fastest fall since October 2009 - while commercial building work fell for the seventh time in eight months.

But housebuilding offered a rare glimmer of hope as government stimulus schemes led to a marginal increase in activity.

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