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Construction output 6.3 per cent down in May

Construction output dropped by just over 6 per cent in May 2012 compared to the previous year, according to the latest figures from the Office for National Statistics

The volume of output in May 2012 was £8.32 billion, 6.3 per cent below the £8.88bn recorded in May 2011. The total volume of new work was 9.4 per cent lower, while repair and maintenance output was flat, reported sister title Construction News.

A monthly comparison showed that output in May was actually 6.2 per cent higher than the £7.83bn for April.

Most sectors saw a year on year decline - with public housing (new work) and infrastructure showing the largest drops. Public housing was 23.3 per cent down, at £301 million, while infrastructure fell by 24.4 per cent to £886m.

The commercial sector saw a 2.2 per cent rise in output to almost top £2bn, but private housing was depressed, with a drop of 2.1 per cent.

Simon Rawlinson, head of strategic research and insight at EC Harris said: ‘The ONS figures released today offer no real surprise and confirm there is a sustained level of downward activity in the UK construction market. This is a worrying trend and repeats what we saw in Q1 when a reduced level of construction activity was blamed for the double-dip recession.

‘Whilst there’s a slight improvement on April’s dismal figures the stats from the past two months offer a strong indication that the Q2GDP figures will also be negative which will inevitably impact market confidence and investors willingness to focus on the UK creating fresh concerns for the Bank of England.

‘It’s worth bearing in mind that these monthly statistics are not seasonally adjusted however so the Jubilee celebrations will undoubtedly have had an impact on the results.’

Noble Francis, economics director at the Construction Products Association said: ‘Although the coalition has consistently made pronouncements of boosting UK construction and the economy, there is little sign of this in reality.

‘Private commercial, the largest construction sector, continues to be the key bright area of construction. Commercial output in May was 2 per cent higher than a year ago and in the first five months of the year was 1.3 per cent higher than one year ago. However, this is not enough to offset the public sector cuts and, overall, in the first five months of the year, construction output was 5.4 per cent lower than a year earlier so prospects for the year as a whole are bleak.

‘If government is serious about recovery in UK construction and the economy, it clearly needs to focus on getting a replacement for PFI sorted out immediately, getting work on the ground now by focusing on repair and maintenance and ensuring that the Green Deal becomes a success by giving householders greater incentives to invest in energy-saving improvements.’

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