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Output down 2.7% in construction’s poor Q1

10 May 2018 | By Neil Gerrard

The construction industry's sluggish start to 2018 has been confirmed in new government figures, with a 2.7% drop in output in the first quarter of the year.

The drop included an 8.8% dip in public house building activity and a 5.9% reduction in public non-housing work.

Private housing output fell by 1.6% over the quarter.

Compared to a year earlier, total output was 4.9% lower during the first quarter.

Rebecca Larkin, senior economist at the Construction Products Association, said: “This release confirms what was reported in preliminary GDP data: construction had a poor opener to 2018.

"The 2.7% contraction in output was revised up from the initial estimate of a 3.3% decline, but this still represents the weakest outturn since August 2012 and a £1.04bn loss in output in three months.

"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."

Mark Robinson, chief executive of Scape Group, a public sector partnership offering managed frameworks and property services, said: "Today’s ONS construction data shows that the industry continued to struggle in March, as the unseasonal weather impacted the speed of project delivery and new work commencing. However, we can expect the data to pick up following the CIPS/Markit announcement last week, which shows that activity rebounded in April.

"But whatever the weather, the industry has a lot of catching up to do if they are going to meet targets for this year. Over the past decade the UK has benefited from the government’s strong and unwavering commitment to infrastructure investment across the country, and this momentum must continue as we swim in to more austere waters, and edge closer to our exit from the EU. Taking bold decisions now will benefit local communities in the years ahead.

"It is very positive to see that private residential building increased by £6m on the year – but this growth is still not anywhere near the levels needed to meet housebuilding targets. It is clear that the government needs to think more creatively about housing delivery. A combined effort between the public and private sectors is vital and government needs to equip local authorities with the funding powers to make a real difference in meeting housing need."

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