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Output down for third consecutive quarter

12 February 2018 | By James Kenny

Image: Khunaspix/Dreamstime.com

Construction output fell 0.7% in the three months to December 2017, the third consecutive quarterly decline in output, according to the latest ONS data. 

Despite output falling in the second, third and fourth quarters of 2017, however, growth in the first quarter ensured that growth in 2017 as a whole was positive.

Construction output also grew sharply month-on-month, increasing by 1.6% in December 2017 and remains at a relatively high level. Output peaked in March 2017, reaching a level that was 31% higher than the lowest point of the last five years, January 2013.

Output fell by £283m in the three months from October to December 2017 compared with July to September 2017. This decrease results from falls across all but two sectors. The most notable decline came from private commercial work, which fell by £324m.

In contrast, private housing continued to make a notable positive contribution to growth. The £403m increase, which represented the fifth consecutive month of growth, meant that the value of private housing work reached its highest level on record.

Rebecca Larkin, senior economist at the Construction Products Association, commented: “Overall growth in construction activity slowed significantly over the course of 2017, with output falling since Q2 and rising only 0.9% in annual terms in Q4.

“The quarter saw continued growth in private housing driven by five years of the Help to Buy equity loan, and early work on major projects such as the Thames Tideway Tunnel driving a 0.7% rise in infrastructure.

“However, even with the government’s £7.4bn equity loan outlay so far and a further £10bn set aside, housebuilding activity could not offset the broad downturn in R&M, commercial and industrial.

“Underscoring the supportive effects of the government’s Help to Buy policy, private housing output is now 28.8% higher than its pre-recession peak. By contrast, commercial output is 26.4% below its historic high, whilst industrial output is 28.5% lower.”

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