Construction industry declines for second month

Published:  18 April, 2016

In February 2016, output in the construction industry was estimated to have decreased by 0.3% compared with January 2016, according to the Office for National Statistics (ONS).

Both all new work and repair and maintenance reported decreases, falling by 0.2% and 0.5% respectively. Within new work, there were decreases in all work types, except private new housing. While within repair and maintenance there were falls in all work types except public housing repair and maintenance.

Compared with February 2015, output in the construction industry increased by 0.3%. All new work was flat while there was an increase of 0.8% in repair and maintenance.

Comparing the three months, December 2015 to February 2016, with the previous three months, September 2015 to November 2015, construction output increased by 1.5%. All new work increased by 2.5%, while there was a fall of 0.3% in repair and maintenance.

When comparing the three months, December 2015 to February 2016, with the same three months a year ago, construction output was estimated to have increased by 0.3%. All new work increased by 0.8% and repair and maintenance fell by 0.7%.

The only period open for revision is January 2016 which has been revised downwards by 0.2% percentage points from a fall of 0.2% to a fall of 0.4%. This was caused by the incorporation of late data.

The latest fall in output within the construction industry indicates uncertainty among businesses and consumers ahead of the EU referendum, the Federation of Master Builders (FMB) has said.

Sarah McMonagle, head of external affairs at the FMB, said: “The ONS figures, which show that construction output fell for the second month in a row, could well stem from uncertainty around the outcome of the EU referendum. Construction is an industry that is particularly sensitive to fluctuations in confidence and the forthcoming referendum seems to be having a negative impact on business owners and consumers alike.

"Much in the same way as the Scottish independence vote weighed on industry confidence back in September 2014, hesitance over investment will likely prevail until we know the result on 23 June. This isn’t a precipitous drop, but after the prolonged downturn experienced by our sector following the financial crisis, these results are disappointing. We can only hope that this contraction is a blip rather than a prolonged decrease in construction output.”

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