Construction sector posts weakest figures since 2012

Britain's construction industry churned out its weakest performance for four years in the first three months after the Brexit vote.

By The Newsroom
Friday, 11th November 2016, 7:21 pm
Updated Wednesday, 16th November 2016, 4:24 pm
The construction sector continues to suffer as a result of outside factors
The construction sector continues to suffer as a result of outside factors

Figures from the Office for National Statistics (ONS) have painted a gloomy picture of the industry, with output falling by 1.1% in the third quarter compared with a 0.1% fall in the quarter before.

The slump was largely driven by a 3.6% drop in repair and maintenance, which was partly offset by a 0.3% increase in all new work.

However, the sector bucked expectations of a September slowdown thanks to a jump in infrastructure work.

The ONS said construction output rose 0.3% in September, up from a revised 1.1% fall in August and above economists’ expectations of a 0.4% drop.

Howard Archer, chief UK and European economist at IHS Global Insight, said it was a lacklustre end to a poor quarter from the construction sector.

“September’s rise of 0.3% was insufficient to prevent construction output clearly contracting in the third quarter, by 1.1% quarter-on-quarter,” he added.

“This was the weakest performance since the third quarter of 2012.

“In fact, by contracting 1.1% quarter-on-quarter in the third quarter after a dip of 0.1% in the second quarter, the sector is effectively in recession.”

Infrastructure work expanded 3% month-on-month in September, while public housing clocked up 5.5% growth and private house building was flat.

The rise in infrastructure work helped offset a poor performance from repair and maintenance, which slipped 1.4% month-on-month in September.