Construction output
continued its recent decline in the three-month on three-month series, reports
the Office for National Statistics, falling by 3.4% in April 2018; the biggest
fall seen in this series since August 2012.
The three-month on
three-month decrease in construction output was driven by falls in both repair
and maintenance and new work, which fell 3.0% and 3.7% respectively.
Following three
consecutive months of contraction in the month-on-month series at the start of
2018, construction output experienced a slight bounceback in April 2018,
increasing by 0.5%.
Improvements to the
quality and accuracy of regional and sub-sector construction estimates have
been made as a result of a methodological improvement, which results in
revisions to Tables 5 and 6 of this publication back to 2010. However, in line
with the standard National
Accounts Revisions Policy, no top-level revisions will be made in this
publication. Total construction new orders also decreased in Quarter 1 (Jan to
Mar) 2018, falling by 4.6%, driven by the continued fall in all other work new
orders.
Rebecca Larkin,
Senior Economist at the Construction Products Association, commented: “The 0.5%
rise in April reflects an element of catch-up after the combination of
Carillion’s liquidation and the bad weather in February and March. This seems
like a false positive, however, as output remained weak compared to April last
year, with the 3.3% fall equivalent to a £430 million reduction in construction
work.
"Only the
private housing and industrial sectors recorded growth, the former driven by
the traditional spring selling season and the latter due to shorter lead times
in factories and warehouses construction.
“The new orders data
confirmed an underlying weakness at the start of the year unlikely to be due to
the weather. Private housing, industrial and public non-housing new orders
increased during Q1, but large falls in the infrastructure and commercial sectors,
which account for almost one-third of total construction, are set to act as a
drag on growth.”
Mark Robinson, Scape
Group Chief Executive, warned that the current uncertainty around Brexit is
having a very real impact on the ground.
"There is less
appetite for big projects in both the private and public sector and this should
be a concern for the Government," he continued. "Sadly, the
Government’s failure to provide clarity on its Brexit policy is damaging both
the construction industry and the wider economy.
“The need for
investment is clear, however, particularly in housing, infrastructure and the
NHS, and there is an opportunity for the Government to push ahead with big
projects to provide an economic boost that will support SMEs and supply chains
in a time of relative uncertainty. If the Government could extend the right of
local authorities to borrow to build council housing, this would provide a
welcome boost to supply chains at a regional level.”
