Construction output declines, but new work increases

The latest construction output figures from the UK declined in the third quarter of 2016.

Statistics from the Office for National Statistics (ONS) show a 1.1% drop in Q3 2016. This was revised up, as expected, from the preliminary estimate of -1.4% released earlier, thanks to the incorporation of late data. New work output increased during the quarter, but the fall was led by lower repair and maintenance activity. On an annual basis, total output rose 0.1%.

“Whilst [the] figures show a contraction in construction output, surveys across the industry have painted a more positive picture of continued increases in construction activity during the quarter,” said Rebecca Larkin, Senior Economist at the Construction Products Association. “This suggests that official data are likely to be revised up further as more data becomes available. Certainly, the ONS data show that new construction work remains the primary driver of activity, rising by 0.3% during the quarter. In contrast, repair and maintenance work was reported to have fallen by 3.6%.

“Despite the contraction in Q3, the rise in new orders in Q2, along with broadly positive expectations expressed in industry surveys, points to a favourable performance over the rest of the year. For the year to date, overall construction output remains 0.6% higher than a year ago.”

The CPA has predicted that UK construction activity will be largely flat for the next two years, with growth in infrastructure and education offsetting falls in activity in commercial offices and industrial factories, among others.

Read more from the CPA online.

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