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Construction plummets 3.3 per cent as UK economy falls

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Construction output fell 3.3 per cent in the final quarter of last year as the UK’s overall GDP shrank by half a per cent

The latest official figures from the Office for National Statistics come as the industry has still yet to feel the full impact of cuts to public sector spending.

The 3.3 per cent fall marks a turnaround from 3.9 per cent growth in the previous quarter and a 9 per cent surge in the period from April to June last year.

Cold weather was blamed for delaying progress on construction sites and contributing to an economic slowdown. The UK construction industry could be headed back into recession if the sector continues to shrink over the next nine months.

Allan Wilen, economics director at industry monitor Glenigan, said: ‘Reduced government funding is increasingly restricting the flow of health, education and other public sector projects, whilst a sluggish housing market has hampered the recovery in private sector activity.

‘December’s severe weather conditions compounded the downturn leaving the value of underlying projects starts during the three months to December 29 [per cent] down on a year earlier.

‘Near term, project starts and construction output will enjoy a temporary boost as contractors press on with work delayed by December’s big freeze. Looking ahead further ahead, we anticipate that a gradual strengthening in private sector commercial and private housing activity will help to offset the impact of further retrenchment in government funded work.’

Construction output compared

Source: Office for National Statistics

Construction output compared

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