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UK construction output falls in the first quarter of 2018

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5th June 2018

According to revised estimates by the Office for National Statistics (ONS), construction output has fallen by 2.7% in the first quarter of 2018. This makes for the biggest three-monthly fall since August of 2012.

The decrease in construction output was said to be driven by falls in both new work and repair and maintenance, which fell by a disappointing 2.6% and 2.8% respectively. The output also fell month-on-month, down by 2.3% in March compared to February.

The ONS explained that business was affected by the adverse weather conditions in February and March 2018 but reported that it was ‘difficult to quantify the exact impact on the industry’.

It also explained that following consecutive periods of month-on-month growth, construction output was at a record high in November and December of 2017 before quickly falling back again.

The December peak was 30.3% higher than the lowest point in April 2013, which marks the lowest point of the last five years. Despite the dramatic decrease in 2018, construction output still remains 22.7% above this.

Senior economist at the Construction Products Association, Rebecca Larkin, said: “This release confirms what was reported in preliminary GDP data: construction had a poor opener to 2018. Output declined in each month of the quarter, undoubtedly capturing the pauses in work relating to Carillion’s liquidation in January and the snow disruption in February and March.

"Notably, private housing lost its position as the industry’s star performer, with output falling from a record high, but activity is expected to accelerate as we enter the spring selling season.”

Blane Perrotton, managing director of the property consultant Naismiths, said: “After months of playing a bad hand well, the construction industry has lost its trump card. Housebuilding was more than just the one bright spot against the increasingly dark backdrop – it had taken on a totemic importance as a beacon of demand, resilience and hope. Without it, the sector looks dangerously exposed.

"Not for nothing is construction is now suffering the highest number of new insolvencies of any industry.”

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