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ONS reports third-quarter drop in construction output

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The value of work in the UK construction industry fell by 2.2 per cent in the third quarter of 2015, according to the Office for National Statistics (ONS)

The decrease in July-to-September construction output followed an increase of 1.4 per cent in the previous three months.

The ONS said that construction output in 2014 as a whole was 8.1 per cent higher than 2013. However, a fall in growth in July to September has reversed the trend seen in the previous three quarters.

In contrast output increased in the same quarter for the three other industrial areas used to measure GDP; services by 0.7 per cent, production by 0.3 per cent and agriculture by 0.5 per cent.

However the Construction Products Association (CPA) said they forecast growth in the sector in 2016, but skill shortages continue to impede progress.

Francis Noble economics director at the CPA said: ‘Skills shortages have been a key issue recently in the industry and are hindering growth, especially in house building. Where skilled labour is available, wage inflation has also been a serious issue, hindering the viability of many sites.

‘Recovery is never a straight line and there are always a few bumps and scrapes along the way.

‘Projects in the pipeline across most construction sectors suggest that activity in the industry will rise in 2016 and our forecasts anticipate 4.2 per cent growth in total construction next year, driven by recovery in house building, commercial and infrastructure activity. Skills shortages, however, are proving to be a key issue constraining growth for the industry.’

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