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Output drops off in August as house-building slows

13 Oct 14 Construction industry output fell in August 2014, with a marginal decline year-on-year but a more pronounced drop on the July 2014 figures.

It was the first year-on-year decline for since May 2013 after 15 months of growth.

August’s 3.9% decline on July, as estimated by the Office for National Statistics, was made worse by a revision to the July figure.  Previous estimates had July’s growth as flat but it is now revised upwards to 1.9% growth.

The overall 0.3% decline in output compared to August 2013 was the first time since May 2013, when there was a fall of 1.7%, that the year-on-year estimate has decreased.

Output is defined as the amount charged by construction companies to customers for the value of work produced excluding VAT and payments to subcontractors.

All new work decreased by 4.8% in August on the previous month, with all types of work except public new housing reporting decreases. Infrastructure was down 6.5%; private commercial was down 5.6%; private industrial was down 4.9%; and public other was down 2.4%.

Even private house-building, the motor for industry growth over the past year or two, was down, by 5.5%, providing the largest contribution to the overall fall in all new work and all work.

Repair and maintenance (R&M) also fell in August 2014, by 2.5%. Non-housing R&M fell by 2.6%.

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