No cheer from CPA.

Construction output has worst fall ever

Published:  15 June, 2009

LONDON: Construction output figures from the Office for National Statistics covering the first quarter of 2009 highlight the true nature of the construction recession. They show …

considerable destocking leading to sharp falls in output.

Total output in construction during the first quarter of 2009 fell an unprecedented 16% compared to the same quarter a year earlier, the sharpest fall on record and is in line with the Construction Products Association's forecasts for 2009.

Private housing output fell 32% in the first quarter compared to a year ago and although recent news from Halifax, Nationwide and RICS has suggested that there may be a slight recovery in the housing market, it is going to be a while before this feeds through into actual output, especially with 2009 Q1 new orders 50% lower than a year earlier.

Commenting on these latest figures, Noble Francis, economics director of the CPA, said: "These figures confirm the seriousness of the downturn that is facing the industry.

"A large number of jobs have already been lost and there is clearly a lot of pain still to be had.

"However, the Government has shown its desire to bring forward capital spending to help provide a fiscal stimulus to the economy. Unfortunately it is unclear exactly how this money is being spent and what it is intended to deliver.

"With the industry facing such gloomy prospects, it is essential that the Government recognises the urgency of the situation and ensures that these announcements feed through to actual work on the ground."

Output in the commercial sector fell by 26% in the first quarter of 2009 compared to a year earlier. Over one-quarter of the sector has been lost in the past year and with new orders in commercial falling 55% in the first quarter of 2009, compared to a year earlier, output will be expected to fall further.

Even in infrastructure, expected to be buoyed by significant workloads in rail, output in the first quarter of 2009 was 5% lower than one year earlier. 

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