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Construction output down for second month in row month – ONS

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Construction industry output fell by 0.9 per cent month on month in February, according to new data from the Office for National Statistics.

Output was also 1.3 per cent down versus February 2014, while the drop in output for the last three months against the previous quarter was 3.2 per cent.

New work was 0.6 per cent down compared with January, with most individual sectors also showing declines.

Only new public housing and public other new work bucked the trend to show an increase.

The figures represent the second consecutive month of overall output decline.

However, some commentators suggested that the ONS figures may not reflect the true state of the market.

Lloyds Bank global corporates managing director for construction Stefan Friedhoff said: ‘As is sometimes the case, the ONS readings feel out of kilter with other data, such as the closely watched Construction Purchasing Managers’ Index, which earlier this month revealed that confidence among firms in the sector is at its highest for almost a decade.

‘The ONS findings feel out of kilter’

‘This feels in line with sentiment from many players, as firms begin to emerge from the depths of the sustained recession by putting more problematic contracts behind them and adapting to the more intense operating environment.

‘There is also the suggestion, encouragingly, that commercial construction is closing the gap on housebuilding which, buoyed by Help to Buy, has been the key contributor to output in the past couple of years.’

Meanwhile the Construction Products Association (CPA) has today (13 April) predicted that construction output is forecast to increase by 5.5 per cent in 2015.

However, the association expects this growth to slow ‘in the following two years due to the impacts of election uncertainty’.

Key predictions from the CPA:

  • Private house building forecast to rise 10.0 per cent in 2015, 5.0 per cent in 2016 and 3.0 per cent in 2017
  • Commercial construction expected to increase 6.4 per cent in 2015, 5.2 per cent in 2016 and 4.4 per cent in 2017
  • Infrastructure activity forecast to rise 7.6 per cent in 2015, 9.2 per cent in 2016 and 10.6 per cent in 2017

Dr Noble Francis, Economics Director, commented:  “Construction output is forecast to increase 5.5% in 2015, which is more than double the rate of growth for the UK economy, due to growth in the three key sectors of construction; private housing, commercial and infrastructure.

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