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Second quarter growth was not as strong as we thought

15 Nov 10 Construction industry output for the second quarter of 2010 grew by less than had previously been thought. Growth has now been revised to 6.8% for the second quarter instead of the more spectacular 9.6%, the Office of National Statistics (ONS) has reported.

Third quarter 2010 output has been put at 4.0% ahead of the second quarter, and 8.6% higher than Q3 2009. This values construction output at £25.8bn in 2005 prices, £1.1bn less than previously reported.

Highlight of the Q3 ONS bulletin was a more than 20% growth in new work, compared to Q3 2009.

ONS revisions have not only downgraded second quarter growth, but also decided that the decline in output in the first quarter was also worse than first thought, at -1.2% rather than the previously reported -0.8%.

The ONS explained: “Revisions to the output series in 2010 are due to late responses from contributors, revisions to the output price indices used to deflate the current prices to constant (2005) prices and due to seasonal adjustment.... Further revisions to the 2010 series have come from a review of model parameters that are used for estimating output of non-responding businesses and in dealing with outliers (unusually large returns from businesses). It is standard practice to review such parameters regularly for new surveys, as more returned data becomes available.”

The ONS’s third quarter bulletin shows that the value of all new work rose by 4.8% over the Q2 and by 20.5% over Q3 2009.

Repair and maintenance output rose by 2.4%, quarter on quarter, but fell 9.6% year on year.

The volume of new private housing work in the third quarter of 2010 was 3% higher compared with the previous quarter. New private housing output in the third quarter of 2010 was at the same level as at the end of 2008 and 23% higher compared with the same quarter in 2009.

The volume of new work in the public housing sector in the third quarter of 2010 was 7% higher than the previous quarter and 48% higher compared with the same quarter in 2009; and was the highest output since the second quarter of 1980. New work in this sector has been increasing for the last six quarters.

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The volume of new infrastructure output in the third quarter of 2010 was 1% lower compared with the previous quarter and 23% higher compared with the same quarter in 2009.

The volume of new work in the public non-housing sector (excluding infrastructure) in the third quarter of 2010 was 5% higher compared with the previous quarter and 32% higher compared with the same quarter in 2009, and the highest output since records began in 1955. New work in this sector has been increasing for the last 13 quarters.

The volume of new construction work in the private industrial sector in the third quarter of 2010 was 15% higher compared with the previous quarter and 38% higher compared with the same period in 2009 which was the lowest output in this sector since records began in 1955.

The volume of new private commercial output in the third quarter of 2010 was 7% higher compared with both the previous quarter, and compared with the same quarter in 2009.

The volume of housing repair and maintenance work (including improvement work) in the public sector in the third quarter of 2010 remained unchanged compared with the previous quarter, but was 8% lower compared with the same period in 2009.

Housing repair and maintenance work in the private sector in the third quarter of 2010 was 7% higher compared with the previous quarter and 2% higher compared with the same period in 2009.

The volume of repair and maintenance work in the non-housing sector in the third quarter of 2010 was 1% higher compared with the previous quarter and 16% lower compared with the same period in 2009. No comparison can be made for repair and maintenance split between private and public due to the introduction of infrastructure repair and maintenance.

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