Construction figures show surprise fall in output

Official UK figures have shown that construction activity took a hit in October.

Infrastructure activity was down on the month. Picture: Jeff J Mitchell/Getty Images

The Office for National Statistics (ONS) said output fell 0.6 per cent month-on-month, compared with economists’ estimates for a 0.3 per cent rise. A drop in infrastructure work and a slowdown in repair and maintenance activity dented progress.

Year-on-year figures were more upbeat, however, with construction output rising 0.7 per cent compared with October 2015, versus estimates of no growth.

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ONS senior statistician Kate Davies said: “October saw the biggest jump in private house building for almost a year though less work on commercial buildings and infrastructure projects saw overall construction output down on the month.

“Meanwhile, new construction orders fell in the third quarter, thanks mainly to a large fall in orders for public projects such as schools and hospitals.”

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Scottish Building Federation managing director Vaughan Hart noted that total output from the construction sector north of the Border during the third quarter topped £3.7 billion, down marginally on the £3.9bn recorded in the same period a year earlier.

However, output from the private housing and private commercial sectors and from repair and maintenance were all up compared to the third quarter of 2015, helping to offset a decline in infrastructure output.

Hart said: “These new figures suggest that the Brexit vote has had no immediate effect on the performance of the Scottish construction sector.

“We anticipated a slowdown in infrastructure activity as major projects such as the Queensferry Crossing draw to a close. More concerning is an ongoing slump in private industrial output with the removal of empty property rates relief having a negative impact on that sector of the industry.”

The ONS made an upward revision to its third-quarter UK construction figures, saying that activity fell 0.8 per cent compared to previous estimates of a 1.1 per cent drop.

IHS Market economist Chris Williamson said: “Official data provide tentative signs that the construction industry and exporters are seeing some signs of improved performance after the post-referendum soft patch. However, construction data and trade numbers are highly volatile.”