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Fri June 18 2021

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Sour spring for construction as output falls again

14 Jun 13 Construction industry output fell 6.5% in April 2013, latest figures from the Office of National Statistics show.

April 2013 output was also down 1.1% on April 2012.

For the three month period February to April 2013 construction output decreased by 4.7% compared with the same period of 2012. New work was down 5.8%, and there were large falls in public other new work (17.3%) and private-commercial other new work (8.8%). Other new work excludes the housing and infrastructure sectors but includes construction on factories, warehouses, schools and offices etc.

There was also a 2.8% decrease in repair and maintenance mainly due to a 7.5% fall in private housing repair and maintenance.

Comparing April 2013 with March 2013, the non-seasonally adjusted total volume of construction output decreased by 6.5%. All sectors shrank except for private housing new work and repair & maintenance which showed increases of 3.6% and 0.4% respectively. Overall repair & maintenance decreased by 9.7%, mainly due to large falls in infrastructure and public housing repair & maintenance, which fell 21.6% and 18.5% respectively.

Pinsent Masons global business consultant Graham Robinson said: "Apart from the government's housing stimulus, the beleaguered construction sector is still very depressed and continues to tread on thin ice. Cuts in public funded construction, the construction industry's largest customer, are still continuing.

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"The long-awaited spending on large capital projects is yet to materialise, but with even the government's Priority Building Schools Programme being cut back significantly, we expect more uncertainty and delay. Although we expect construction to grow from the end of 2013, it will be from a deeper than expected trough that will have significantly damaged the industry in the longer-term."

David Crosthwaite, an economist with construction consultancy Aecom, commented: “Another month and a further disappointing set of data for the construction industry. The latest ONS release highlights the almost inexorable decline of construction output both year-on-year and month by month.

“Both new work by public corporations and private housing repair and maintenance registered the largest declines.  The only bright spot was growth registered in the industrial buildings sector, however it should be noted that this is currently the smallest sector by volume of activity.

“Over the recent past new work declines have accounted for much of the downturn but worryingly now even repair and maintenance output is showing signs of contraction.

“Construction output is now significantly lower than the previous lowest point during this recession, at the end of 2009, and in volume terms output levels are back to those last seen at the beginning of 1999. One begins to wonder how much lower construction output can go before some level of intervention takes place.”

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