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Autumnal slowing for construction output

12 Jan 15 Latest official estimates have output in the construction industry declining 2.0% in November 2014 compared to the previous month.

In November 2014 all construction work decreased by 2.0% compared with October 2014 but increased by 3.6% compared with November 2013.

Office for National Statistics (ONS) Output in the Construction Industry figures for November show all types of construction work declining, month-on-month, except public housing repair & maintenance. However, repair and maintenance (R&M) was the largest contributor to the fall, decreasing by 4.5% overall. Non-housing R&M fell by 6.0% and private housing R&M fell by 4.1%.

All new work decreased by 0.4%, with all types of new work except private new housing and infrastructure reporting decreases: public other (-2.7%), private industrial (-2.3%), public new housing (-1.3%) and private commercial (-1.2%).

However, the year-on-year comparisons – against November 2013 – show 3.6% growth in construction industry output. There were increases in both all new work and repair and maintenance of 5.7% and 0.1% respectively. Within all new work there were increases in new housing (21.9%) and private industrial (8.8%), with other work types reporting decreases.

Comparing the three months, September to November 2014, with the previous three months, June to August 2014, construction output fell by 0.9%. Repair and maintenance decreased by 2.5% while all new work was flat.

ONS said that longer-term growth was confirmed when comparing the three months, September 2014 to November 2014 with the same three months of 2013. Over this period, new work increased 4.6% and R&M increased by 2.5%.

October 2014 output has been revised upwards 0.3 percentage points, from a fall of 2.2% to a fall of 1.9%.

Table 2: Construction output summary tables, chained volume measures, seasonally adjusted

 

Percentage change

Sept-Nov 2014 against Sept-Nov 2013  

Sept-Nov 2014 against Jun-Aug 2014

Nov 2014 against Nov 2013

Nov 2014 against Oct 2014

Construction

Total All Work

3.7

-0.9

3.6

-2.0

Total All New Work

4.6

0.0

5.7

-0.4

Total Repair & Maintenance

2.5

-2.5

0.1

-4.5

       

All New Work

Total All New Work

4.6

0.0

5.7

-0.4

New Housing

       

  Public Corporations

20.5

-0.6

14.9

-1.3

  Private Sector

21.9

2.3

23.8

1.0

Other New Work

       

Infrastructure

-4.1

3.4

-3.5

0.9

Excl Infrastructure

       

Public Corporations

-3.8

0.2

-1.5

-2.7

Private Sector 

       

Private Sector - Industrial

14.7

-4.8

8.8

-2.3

Private Sector - Commercial

-5.3

-3.2

-3.0

-1.2

       

Repair & Maintenance

Total Repair & Maintenance

2.5

-2.5

0.1

-4.5

Housing

       

Public Corporations

0.6

-2.8

0.4

0.2

Private Sector

0.8

-3.6

-2.7

-4.1

Non-Housing

4.1

-1.7

1.9

-6.0

The graph above shows that a decline in construction industry output in the later months of the year are statistically common and so November 2014's downturn should not be cause for alarm. 

Chris Temple, engineering and construction leader at consultant PwC, commented: “The fall in output for November continues the recent trend of the construction sector catching its breath. There is a lack of large infrastructure projects at the moment, accounting for the lull in that part of the sector. Furthermore, the economy, particularly in Europe, is showing some signs of weakness, which has knock-on effects for business confidence and the short-term order books of construction firms.

“There are no indications that this will become a longer-term trend, and our clients are highly optimistic for their growth prospects in 2015.

“Indeed, the tale of last 12 months is one of growth – up 3.6% on November 2013 – offering further encouragement to the industry that the indicators are good.

“New housing was up more than a fifth on a year ago, showing that house building is a key growth area. House builders have a healthy pipeline and are building at healthy rates, and we expect this to continue throughout 2015.

“A note of caution, however, is that the increase in this area of the housing market is unlikely to have any significant impact on house prices overall."

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