Construction output falls into steady decline

Aaron Morby 11 years ago
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Latest official Government figures for new construction output in August reveal the industry is again on a path of steady decline.

All new work in August fell by 5.4% compared with last year.

But more alarmingly, the three-month figure, which offers a clearer pointer to the underlying trend, fell 1.8% against last year.

The latest Office of National Statistics figures are another serious blow to the Government, which has seen all its key economic indicators flashing red.

Only private house building and infrastructure registered any growth, up 3.3% and 10.8% respectively, in the last three-month period compared with a year ago.

The Government’s publicised efforts to kick-start construction of affordable homes has so far failed to have any impact.

Public housing new build fell 5.3% in the last three months, and plunged 11% in August compared to a year ago.

The picture was just as gloomy for refurbishment and maintenance activity, which fell by 2.2% as home owners and councils cut back on repair and improvement work.

Richard Threlfall, KPMG’s UK head of infrastructure, building and construction, said: “The latest construction output figures are yet more evidence that the green shoots of recovery are withering; particularly worrying is the near 25% fall in private industrial new work.

“It’s clear that sustainable recovery needs to be driven by private sector investment and this big drop shows the lack of confidence across the industry.

“Without a foreseeable up tick in the coming quarter the impact on the construction market is expected to be sharp and prolonged.

“However, there is some small comfort in the 3.3% lift in private new housing – new house starts are probably the Government’s quickest way of injecting short-term growth.”

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