Total Construction Output Down but New Work Up

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Total Construction Output Down but New Work Up

In the first quarterly estimate for construction output based on figures that were collected wholly post-referendum (Quarter 3 July-September 2016), the latest ONS figures show that construction output declined 1.1% in the third quarter of 2016.

This was revised up, as expected, from the preliminary estimate of -1.4% released last month, due to the incorporation of late data. New work output increased during the quarter, but the fall was led by lower repair and maintenance activity. On an annual basis, total output rose 0.1%.

Rebecca Larkin, Senior Economist at the Construction Products Association, commented:  “Whilst today’s figures show a contraction in construction output, surveys across the industry have painted a more positive picture of continued increases in construction activity during the quarter. This suggests that official data are likely to be revised up further as more data becomes available.  Certainly, the ONS data show that new construction work remains the primary driver of activity, rising by 0.3% during the quarter. In contrast, repair and maintenance work was reported to have fallen by 3.6%.

“Despite the contraction in Q3, the rise in new orders in Q2, along with broadly positive expectations expressed in industry surveys, points to a favourable performance over the rest of the year. For the year to date, overall construction output remains 0.6% higher than a year ago.”

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