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Mon June 17 2019

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Housing up but infrastructure work slows

12 Jan 17 Construction output in Great Britain fell by 0.2% in November 2016 compared with October 2016, largely due to a contraction in non-housing repair and maintenance, but it was up 1.5% year-on year.

In the latest Office for National Statistics construction output report, the three months September to November 2017 show a rise of 1.6%, year on year, with all new work up 4.3% but repair & maintenance down 3.2%.

Over the quarter, private housing was up 12.6% but infrastructure was down 6.1%.

Despite the overall fall in all work during November 2016, new housing continued to grow at an increasing overall rate of 1.2% in comparison with October 2016, representing the biggest increment since February 2016. This has resulted in housing output reaching an all-time high of £2,639m.

Rolling three-month on previous three-month and monthly all work, November 2016

Components of all work, November 2016

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Rebecca Larkin, senior economist at the Construction Products Association, commented: “Overall weakness in official construction output data looks to have persisted in the final three months of 2016, which stands in contrast to other industry surveys. One common theme reported in recent months, however, is the outperformance of private housing relative to other sectors such as commercial, industrial and repair and maintenance. In November, private housing output rose 0.5% to reach the highest level since 2010 and compared to a year earlier, output increased 12.5%. Activity has no doubt been sustained by government support measures such as Help to Buy, strong growth in house prices and the availability of low-interest mortgages.

“Economic and political uncertainty is expected to intensify this year and combined with rising inflation denting confidence, means we are unlikely to see similar growth rates in private housing in 2017. Public housing, on the other hand, increased 5.6% in November and, whilst monthly data can be volatile, this could signal a pickup in public sector house building after activity has been disrupted by two years of changes to funding programmes.”

Redrow chief executive John Tutte commented: “It’s very encouraging to see that the strong and sustained upward trend in new housing culminated in an all-time record high in output levels in November. It is also encouraging that 190,000 homes were added to the UK’s overall housing stock last year, an annual increase off 11%. In my view this puts us on track to hit 200,000 additional homes in 2016/17, which hasn’t been achieved since 2008, but this is still below the levels needed to satisfy our growing population, with some commentators putting this figure as high as 300,000 homes per year.”

Shraga Stern, director of Decorean, said: “The figures show very little difference from a year ago, and after 12 months of political, and sometimes, economic turmoil, this shows that house-building is as important as ever. Encouragingly, the fact that new work in November increased, with new housing output continuing to grow, bodes well for 2017, and is something we, at Decorean, are continuing to see day to day.”


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