Dire output stats revised – downwards

Grant Prior 12 years ago
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The official slump in construction is even grimmer than feared after the Office for National Statistics revised its industry output figures downwards today.

The original ONS estimate for output during the first quarter was a 3% fall compared to the previous three months.

The news is now even worse with a 4.8% fall the latest estimate from government number crunchers.

The dire reading is at odds with positive surveys from construction buyers and surveyors and talk of a fledgling recovery among civil engineering contractors and specialists.

The ONS data shows the volume of new work fell by 6.9% while repair and maintenance dropped by 0.4% on the previous quarter.

Infrastructure work showed the largest fall at 15.9%

Noble Francis, Economics Director at the Construction Products Association said: “The construction industry is now firmly back in recession and, although there are some areas of growth, such as private housing, the overall picture shows an industry clearly suffering from the effects of public sector cuts.

“Public housing output fell 11% during the first quarter of 2012 and public non-housing, which covers education and health, fell 7% in Q1.

“Equally worrying, although government expected that the private sector would fill the void, the Q1 figures show that this was not the case. Construction output in the private sector also contracted in Q1, suffering from poor confidence and lack of lending. Private commercial, the largest construction sector, fell by 7.1% in Q1.’

“The fall in construction during Q1 is greater than ONS estimated for GDP just a few weeks ago and it is clear that this will have a negative impact upon Q1 GDP, making the recession significantly worse than initially expected.

“Unless confidence and lending improves significantly, private sector construction will remain subdued and the effects of further public sector cuts are likely to ensure that construction has a negative impact on the wider economy over the next 12 months.”

CECA director of external affairs Alasdair Reisner said: “These disappointing figures – the worst figures for two years – show that the UK’s construction industry still has a mountain to climb.

“While CECA’s own Workload Trends Survey has recently started to show slight indications of recovery, the outlook for the sector remains extremely challenging with no guarantee that further declines can be avoided.

“The industry requires continuing support, given the short and long term benefits it brings to the economy in terms of jobs and growth.

“For civil engineering contractors to play their part in delivering the infrastructure on which British businesses depend, and in doing so play their part in returning the economy to growth, the government must enable the establishment of new models of infrastructure funding with urgency, and continue to push to unblock stalled projects.”

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