UK construction output slumps in August

Output in construction fell by 3.9% in August 2014 compared to the previous month, official data has revealed.
August data by the Office for National Statistics (ONS) shows that all new work decreased by 4.8%, with all types of work except public new housing reporting decreases.

Compared with the same period in 2013, output in the construction industry showed a decrease of 0.3%. It is the first time since May 2013, when there was a fall of 1.7%, that the year-on-year estimate has decreased.

Industry experts have said that the decrease in output is largely due to upward revisions in July’s data rather than major declines over the month.

Michael Dall, lead economist at Barbour ABI, said: “While all sectors, other than public housing, fell in August the longer term trends in the residential sector are still very encouraging. The other major sectors in construction however are not performing as well with infrastructure and commercial continuing to record declines in growth.

“It is vital for the industry that all of these sectors grow to ensure pre-recession levels of activity are achieved sooner. Recent positive figures on new orders for commercial projects, and increasing levels of business investment in the economy, should hopefully have a positive impact in the coming months.

“For these reasons while today’s declines are disappointing the improving sentiment in the commercial sector in particular should start to boost output levels in the coming months.”

The figures are a stark contrast to Markit/CIPS UK Construction PMI released last week, which showed the construction sector grew at one of the fastest rates in September.

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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