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Construction output falls 12% on last year

12 Oct 12 The total volume of construction output in August 2012 was 11.6% lower than in August 2011, according to Office for National Statistics estimates.

Comparing the three months from June to August 2012 with the same three months of 2011, the volume of construction output decreased 11.9%.

New work decreased 15.6% and repair & maintenance fell 4.2%.

All numbers are based on constant (2005) prices and are not seasonally adjusted.

In the June-August quarter, which saw both the royal jubilee celebrations and the Olympic Games disrupt business activities, the volume of new public housing work decreased by 20.7%. New private housing dropped 12.1%. New infrastructure fell 18.4%. New public non-housing (excluding infrastructure) was down 21.9%. And private commercial was down 14.4%.

The only sector that increased over this period was new private industrial work, which rose by 1.8%.

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David Crosthwaite, an economist for construction and property consultant Aecom, said: “Today’s ONS construction output data release confirms what many of us in the industry already know only too well. Total output is almost 12% lower than the same period a year ago and 2012 looks like a very difficult year for construction unless there is a significant uplift in the final quarter of the year.

“Furthermore, examination of historic output data indicates that the period since the third quarter of 2008 exhibits one of the worst construction slumps in a generation. Unfortunately, new orders data suggests the position could get worse unless some stimulus action is taken.”

Scottish Building Federation chief executive Michael Levack said: “There can be no doubt that this economic downturn is biting just as hard – if not harder – than the previous one. There is a lot of bold rhetoric at the moment about the need to prioritise capital investment. When he makes his autumn statement in early December, the chancellor needs to match that rhetoric with real action. Directing additional public resources towards delivering key infrastructure will give a badly needed boost to the building industry – and set our economy on the long overdue path to recovery.”

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