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Construction output suffers biggest decline since 2012

Drop decrease down fall
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Construction output fell by 1.3 per cent in the second quarter of the year, according to new data from the Office for National Statistics

The quarterly decline, reported the AJ’s sister title Construction News, was the largest such fall since Q3 2012.

Six sectors saw a decline in Q2 compared with Q1, with the largest falls in output reported in public other new work (-6.6 per cent), non-housing R&M (-2.4 per cent) and private commercial (-2 per cent).

Private housing output recorded a minor decline of 0.2 per cent, while infrastructure output fell 0.5 per cent.

Only public housing (2.9 per cent), private industrial (0.4 per cent) and public R&M (0.6 per cent) recorded output growth in Q2 compared with Q1, with the rise in industrial activity the sector’s first for a year.

Despite the quarter-on-quarter decline, total construction output was still 0.4 per cent higher in Q2 than the same quarter of 2016, with public housing, private housing, private commercial and infrastructure all up year on year.

However, private industrial output is still 21.7 per cent lower than it was 12 months earlier, while public other new work output is down 6.9 per cent year on year.

Month on month, construction output edged down 0.1 per cent in June compared with May, representing the third consecutive month of decline.

Public housing posted the largest monthly fall at 7.1 per cent, while public other new work declined 3.7 per cent to hit its lowest level for over five years.

Private industrial output saw the largest increase at 7.3 per cent, while private housing output also increased by 5.1 per cent.

The data from the ONS follows findings from the Markit/CIPS Construction PMI for June, which reported a slowdown in activity compared with May.

Survey respondents also pointed to higher risk aversion from clients, with some said to be delaying decisions due to heightened political uncertainty.

Scape Group chief executive Mark Robinson said he was disappointed to see a decline in public sector output in June and called for ’consistent investment’ from the public sector.

’A plan must therefore urgently be put in place to safeguard against activity dipping back to the lows we experienced in previous months and years,’ he said.

’More energy also needs to be put into infrastructure projects, with the government’s cancellation of rail electrification across the North a concerning signal – at present there is little clarity or emphasis on how the government plans to upgrade infrastructure across the country beyond flagship projects like HS2 and Crossrail.’

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