Construction output falling £1bn a month

Aaron Morby 12 years ago

Construction output is now falling at around £1bn a month as new order levels fail to fully replenish long-running contracts coming to an end.

According to the latest Government output figures released for July, the last three months of output is now running around 10% below the same period last year.

Since the start of the year output has shrunk by £5bn on a annualised basis, with big hits in commercial and infrastructure output.

Declining public spending and a failure of private work to fill the gap saw new work fall 14.2% in the three months from May to July.

The picture is less bleak for the repair and maintenance industry where output is largely holding up and recorded just a 1.2% fall compared to the same period last year.

Over the same period new infrastructure work fell by very nearly a quarter. Social housing and other public building work fell by around 22%.

For those looking for positives infrastructure repair & maintenance rose 3.5% and private industrial new work rose 1.5%.

David Crosthwaite, an economist for construction and property consultant AECOM said: “While the ONS construction output data look disappointing they are perhaps not surprising.

“Total construction output declined by 10.1% in July 2012 compared to the same period in 2011.

“Construction is by and large a response to investment and given that both public and private sector levels of investment have declined significantly during the recession the impact on construction is to be expected.

“New construction (in particular infrastructure) has been hit much more severely than repair and maintenance construction.

“Again this is largely what one would expect in tough economic times as clients are more prepared to repair and maintain existing facilities than commission new structures.

“There are calls for intervention by the Government to kick-start the wider economy by increasing levels of investment in construction, but the question remains if this Government has the appetite for a policy U-turn/Plan B.”


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