Construction output falls in January

Published:  14 March, 2016

Construction output in January 2016 fell by 0.2% compared to the previous month, according to the latest Office for National Statistics (ONS) figures, but the sector has still seen growth in new orders.

According to the figures, construction output was 0.8% lower in January 2016 than in the same month the previous year, with construction new orders in Q4 of 2015 0.5% lower than Q3, but still 1.4% higher than they were one year ago.

Professor Noble Francis, economics director at the Construction Products Association, commented: "The fall in the ONS' construction output in January was disappointing but largely reflects the impacts of poor weather at the start of the year with floods in many parts of the country. In addition, skills shortages in sectors such as housebuilding have meant that project costs have risen and affected the viability of sites.

"This fall in output is expected to be temporary, however, and the ONS' construction new orders data suggest that activity should increase significantly during 2016. New orders can be volatile, so it is better to look at the data within the context of the year as a whole. New orders in 2015 were 2.8% higher than in 2014.

"Our forecasts anticipate that output will increase 3.6% in 2016, with growth in the three largest sectors of construction; private housing, commercial and infrastructure. Nevertheless, while fundamentals such as projects in the pipeline remain good, the risks around the forecast are quite high due to skills shortages, concern about the delivery of major projects like Hinkley Point C and increased uncertainty for investors owing to the EU referendum."

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