Latest ONS figures reveal dip in construction output

The latest figures from the Office for National Statistics (ONS) reveal a 4.3% fall in construction, the first year-on-year fall since May 2013.

In August 2015, output in the construction industry was estimated to have decreased by 4.3% compared with July 2015 and by 1.3% compared with August 2014.

All new work decreased in August 2015 compared with July 2015 by 3.6%, repair and maintenance (R&M) decreased by 5.6% over the same period.

There have been falls in all work types in August 2015 with infrastructure reporting the largest decrease.

The figures also reveal that new housing output fell by 3.0% in August from the previous month. Both private and public new housing output fell by 1.6% and 9.9% respectively over the same period. In comparison with August 2014, new housing output fell by 5.8%, with public housing providing all of the fall, down 28.9%, while private housing increased by 0.2%.

The level of housing output remains high in comparison to earlier years, but that it has fallen by 8.0% from its peak in April 2015.

New orders for housing in Quarter 2 (Apr to June) 2015 also showed a decline, falling by 2.3% compared with Quarter 1 (Jan to Mar) 2015.

Mark Robinson, Scape Group chief executive, said: “Today’s figures need to be dissected and examined carefully before drawing any overall negative conclusions about the trajectory of construction output in the UK. Whilst we have seen a contraction in the annual year-on-year growth rate, this is driven by a substantial dip in repair and maintenance output – in fact, all new work increased by 3.1% annually.

“This annual growth was driven by a substantial increase in infrastructure output, which is a promising sign given David Cameron’s renewed focus on housing, which will need to be complimented by schools, hospitals, fire stations and community leisure facilities. It is worth remembering that pin-pointing and dwelling on monthly fluctuations is unhelpful and distorts the bigger picture – we should always consider the bigger picture and take a longer view.”