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Fri September 24 2021

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August output dips slightly

11 Oct 13 Construction output shrank marginally in August 2013 but remains on course to show growth for the third quarter of the year.

Latest estimates from the Office for National Statistics indicate that output in August declined by 0.1%, following growth of 2.8% in July.

Year-on-year, August 2013 saw 4.0% growth.

The August data continues the recent trend of volatility in construction output, rising by 1.9% in Q2 2013 after a decline of 1.3% in Q1 2013.

The figures are seasonally adjusted and exclude Northern Ireland.

New work output declined 0.1% in August and repair & maintenance fell 0.2%.

There were mixed performances across the different types of work. Private industrial and private housing both saw new work increase by 3.9% and 1.6% respectively. Public other new work and private housing repair and maintenance fell by 3.2% and 1.8% respectively.

When comparing August 2013 with August 2012 construction output increased by 4.0%, predominantly due to a 5.5% increase in new work. Within the new work category, new housing increased by 16.7% while infrastructure fell by 5.5% when compared with August 2012. In August 2013, these sectors account for approximately 32% and 19% of all new work respectively.

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Construction output shows year-on-year growth for three consecutive months for the first time since May 2011 with the main contribution to this growth coming from the new housing work.

Comparing the three months, June to August, with the same three months 12 months ago, the output of construction increased by 3.0%. Over the same period new housing showed growth of 14.7%, the largest three month on a year growth since January to March 2011. Construction output grew by 2.4% when compared with the previous three months (March to May 2013).

Turner & Townsend managing director Steve McGuckin commented: “Britain's construction industry has been making great strides for much of this year – and August's underwhelming figures are a blip, not a trip.

"Several public sector construction programmes are winding down, so the 3.2% fall in public sector output was to be expected. But it is encouraging that the resurgent private sector construction is mitigating the impact so well. Private industrial and private housing output were both up strongly in August, helping the industry as a whole keep honours even.

"The long-term trajectory is upward, and the industry's 4% year-on-year increase in output shows how far it has come. Its response to the surging demand for housing is clear - with housebuilding accounting for nearly a third of all new work in August.

"The private sector rode to the rescue of the declining public sector in August, and we expect that trend to continue. With public sector investment in property likely to be squeezed at least until after the next election, the private sector has a great burden of expectation on it.”

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