Construction sector output slumps 3.3%

Published:  25 January, 2011

LONDON: ONS figures released today show construction sector output fell by 3.3% in the last three months of 2010, while the overall economy shrunk by 0.5%.

Poor weather in December not only hit the construction sector but also slowed the whole economy, which shrunk in size by 0.5% in the final quarter of the year, compared to Q3.

The 3.3% drop in the construction sector virtually reverses the 3.9% increase between 1 July and 30 September.

Despite the recent, expected, drop off in construction sector output, the sector has increased in size since when compared to 2009. Year-on-year growth in the sector is estimated to have been 6.9%, according to today's preliminary figures.

The construction sector alone, represented 0.2% of the fall in the wider economy.

While today's construction figures will not come as much of a surprise, the 0.5% fall overall is particularly negative, as many economists were expecting further growth.

The ONS blamed the poor economic performance on the bad weather and said: "The change in GDP in Q4 was clearly affected by the extremely bad weather in December last year."

"The disruption caused by the bad weather in December is likely to have contributed to most of the 0.5% decline, that is, if there had been no disruption, GDP would be showing a flattish picture rather than declining by 0.5%.

"We should emphasise that this assessment of the effect of the bad weather is the best we can make it at this stage, but is still inevitably uncertain."

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