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UK construction output suffers worst annual fall since 2013, survey finds

Sector is lacking in confidence and bad weather can;t be blamed for all of the downturn, say experts

Ben Chapman
Wednesday 11 April 2018 12:03 BST
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Output contracted by 1.6 per cent in the month as infrastructure spending decreased 9.4 per cent
Output contracted by 1.6 per cent in the month as infrastructure spending decreased 9.4 per cent

Construction sector output was 3 per cent lower in February than a year earlier, marking the largest annual fall since March 2013, an official survey found.

On a quarterly basis, construction output fell 0.8 per cent in the three months to February 2018, driven predominantly by the continued decline in repair and maintenance work, the Office for National Statistics said.

The ONS said it had received “some anecdotal information” from a small number of survey respondents regarding the effect of bad weather on their businesses in the final week of February 2018.

Output contracted by 1.6 per cent in the month as infrastructure spending decreased 9.4 per cent, the latest monthly ONS survey of the sector found.

Adverse weather conditions across the UK could have potentially contributed to the decline in construction output, the ONS said, adding that it was difficult to quantify the exact impact on the industry.

Blane Perrotton, managing director of property consultancy Naismiths said only so much of February’s slowdown could be explained away by icy weather.

“Despite the modest upward revision to January’s figures, the message from the first two months of the year is clear – activity is slowing and the brief burst of momentum seen at the end of 2017 is now all but forgotten,” he said.

“The bright spots are getting fewer and further between. Housebuilders continue to shine as low interest rates and a chronic shortage of homes keep demand burning bright.

“But these strong points are increasingly looking like outliers, as commercial property demand cools and developers concentrate on completing existing projects rather than commissioning new ones.

“Though the economic backdrop remains benign – with low interest rates, readily available finance and a resurgent Pound bringing down the cost of imported construction materials – the construction industry’s magic ingredient, confidence, remains scarce.

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