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ONS: Construction output fell 1.3% in May

10 Jul 15 Despite all other evidence to the contrary, government statisticians assert that construction output shrank in May 2015.

According to the Office for National Statistics’ latest bulletin, output in the construction industry was estimated to have decreased by 1.3% in May compared with April 2015. Both all new work, and repair and maintenance contributed to the fall.

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

The official data appears to be at odds with other well-regarded industry data sources. National House-building Council (NHBC) new home registrations were up 9% in May and the

Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) registered 55.9 in May, up from 54.2 in April and well above the neutral 50.0 threshold.

The ONS says that all new work output decreased by 1.5% in May, with all types of new work except infrastructure reporting decreases. Total housing reported the largest fall of 5.8%, with smaller falls from private industrial, public other and private commercial of 3.3%, 1.4% and 0.3% respectively.

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Repair and maintenance (R&M) decreased by 1.0%. Falls in non-housing R&M (-1.9%) and private housing R&M (-0.8%) were offset slightly by public housing R&M, which increased by 1.8%.

Compared with May 2014, output in the construction industry showed a year-on-year increase of 1.3%. All new work increased by 3.2% while repair and maintenance decreased by 1.7%.

Comparing the three months March 2015 to May 2015, with the previous three months December 2014 to February 2015, construction output fell by 0.4%, ONS reckons. All new work decreased by 1.7% and repair and maintenance increased by 1.8%.

When comparing the three months March 2015 to May 2015 with the same period a year earlier, construction output was estimated to have increased by 2.7%. All new work increased by 4.2% and repair and maintenance by 0.3%.

However, there is every reason to suppose that all of these numbers will be revised in due course. A month ago the ONS said that construction industry output in April 2015 decreased by 0.8% compared with March 2015. With the addition of late data, this has now been revised to a fall of 0.5% instead.

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