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New construction orders drop

13 March 2019 | By Neil Gerrard

Image: Dreamstime/Jose Alberto Barci Figari

New construction orders fell by 10.5% in the final quarter of last year, according to the latest official figures.

Data from the Office for National Statistics (ONS) showed new orders in Q4 2018 were down 1.9% compared to Q3 2018 and dropped 10.5% compared to the same period the year before.

Meanwhile, the figures also revealed that output rose 2.7% in January 2019 but was 0.6% lower on a three-month basis, owing to weakness in three of the largest sectors of activity during the period: private housing, commercial and private housing repair, maintenance and improvement (RM&I).

Rebecca Larkin, senior economist at the Construction Products Association, said: “Combined, private housing, commercial and private housing RM&I account for half of total construction output so any weakness in these sectors will provide an unavoidable drag on overall activity. The last three months of data have been as volatile as the political backdrop, but looking at the broader picture, output has remained at relatively high levels over the last 12 months.     

“New orders in 2018 declined to the lowest level since 2012 and there are clear struggles to gain traction in the commercial and public housing sectors. Investment decisions on major offices and retail developments have stalled, not surprisingly, due to the lengthy period of economic uncertainty, but the record-low level of new orders in public housing is concerning given the government’s shift in policy focus to increase building by local authorities and housing associations.”  

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