Construction sector posts weakest figures since 2012

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.