We just got another worrying sign the UK is entering a slowdown

Construction output shrunk by 3.6% in March, the Office for National Statistics said on Friday.

The slowdown is the worst performance in the building sector since December 2012. The ONS also revised downwards its estimate for the shrink in construction output in the first quarter of this year, from a 0.9% contraction to 1.1%.

While housebuilding continues to grow, work on infrastructure and other construction projects is dipping. Meanwhile repair work is diving, which is dragging down the figures.

The disappointing construction figures are the latest sign of a slowdown in UK growth this year. Manufacturing shrunk for the first time in three years in April, with Markit saying there's a sense of "deep unease" in the sector. Industrial output in Britain is also in recession for the first time in 3 years.

The looming EU referendum is proving a big drag on economic growth, with many businesses sitting on their hands until after the result comes in. Bank of England Governor Mark Carney yesterday warned that if Britain votes to leave the EU the UK could fall into recession.

But Britain's slowdown comes amid a shaky recovery for Europe, with industrial production dipping and Markit calling the EU's overall pickup "tepid."

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