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ONS reports first-quarter drop in construction output

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The value of work in the UK construction industry fell by 1.1 per cent in the first quarter of 2015 compared with the last three months of 2014, the Office for National Statistics (ONS) has said

January-to-March construction output figures were also down 0.3 per cent year-on-year, according to new estimates published today (May 15).

The ONS said the drop was the first year-on-year reduction for the sector since the second quarter of 2013, and that downward pressure had come from a 1.7 per cent fall in new work during the quarter.

There was some light for the construction industry, however. The ONS said the over-all negative figures resulted from poor January and February output, while March’s figures represented a month-on-month increase of 3.9 per cent and a 1.6 per cent increase on the year.

Data odds with other indicators

The Construction Products Association (CPA) said the official data – which on a quarter-by-quarter basis would suggest the sector was in recession – was at odds with other indicators.

It said in a statement: ‘The official data contradicts a growing body of recent evidence from [the CPA] and other industry sources. Several independent organisations, including Experian and Markit/CIPS, have similarly reported growth in construction activity. 

‘These findings were reinforced this week by the Bank of England, which published its latest Inflation Report highlighting concerns with the comparative figures.’

The CPA said the association had met with the ONS earlier this month to raise concerns about the original estimate for construction output in the final quarter of 2014, and that the two organisations would continue to work together on the issue.

Previous story (AJ 13.04.2015)

Construction output down for second month in row month - ONS

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.

‘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.’

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