New construction orders slump

Published:  10 December, 2012

The third quarter of 2012 saw the third lowest level of new orders on record, according to official statistics published on Friday. Total orders in the third quarter increased 5.4% on the second quarter to £10.2bn, but it was still the third lowest level of new orders on record and 6.7% down on the level in the third quarter of 2011.

Commercial and private housing, that accounted for 36% of total construction output in 2011, saw orders decline both quarter-on-quarter and year-on-year in the third quarter. New orders for commercial work, the largest construction sector, were 18% lower in the first nine months of 2012 compared with the same period in 2011, while private housing saw orders decline by 7% from a year earlier.

Milja Keijonen, senior economist, Construction Products Association said: "Our intelligence of the trading conditions the industry is experiencing, has indicated a difficult market and these figures from ONS certainly endorse this position.

"However, there are some brighter areas, as both infrastructure and private industrial construction new orders are showing double digit increases of 46 and 24% respectively for the first nine months of this year, compared to the same period last year."

Simon Rawlinson, head of strategic research at consultant EC Harris, said the fall in private commercial orders was 'shocking'. "In real terms, these are the worst quarterly figures seen since 1979 - hardly a comforting thought," he said. He described public sector and private housing levels as 'stable' sand that increases in infrastructure orders did not necessarily amount to a pattern of sustained growth given the sector's 'lumpy pattern of sales'.

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