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Construction industry suffers output setback

Construction industry suffers output setback
The construction sector in the UK has suffered a setback after new figures have shown a reduction in output in the fourth quarter of 2012.

A report published by the Office for National Statistics (ONS) revealed that output for the sector had dropped by 9.1 per cent up to November 2012 with the volume of infrastructure contracts also falling by 2.4 per cent. These figures were compared with the same period in the previous year and have provided cause for concern among a number of companies within the industry. The Civil Engineering Contractors Association (CECA) has already fired a warning over the declining statistics.

The organisation stated that the slowdown of work within the infrastructure sector is worrying news for the wider economy and could provide further hindrances in the coming years. Commercial building has also fallen by 16 per cent in the three month period between September and November and considering that this area accounts for over a fifth of the construction industry officials have been quick to warn against further declines.

Alasdair Reisner, CECA director of external affairs, said: "CECA hopes that recent efforts to stimulate immediate activity will bear fruit, both for the sake of our members and for UK plc. At the same time, these figures show that there is no room for complacency if the infrastructure sector is to act as a motor to kick-start growth in the economy."

The main reasoning behind the drop in output has been attributed to the fact that many large scale projects have come to an end and there have not been any fresh developments to take over. The ONS' figures revealed that the amount of new work within sector had also fallen by 12 per cent.

It is yet another blow to the industry which suffered a significant setback recently as the Markit/CIPS UK Construction Purchasing Managers' Index showed a decline, dropping from 49.3 in November to 48.7 the following month. The index has been below 50 in four of the past five months which marks a level of contraction within a sector.

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Date: 11/01/2013 16:26:46

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