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Construction output suffers 2013 Q1 drop

Construction output suffers 2013 Q1 drop
The construction sector has been dealt another blow after output fell to a 15-year low for the first time in three months.

Figures from the Office for National Statistics (ONS) showed that the work declined by 2.4 per cent in the opening quarter of 2013 compared to the final part of 2012. Nearly all sectors of the industry reported drops in output apart from private housing repair and maintenance which marked a slight rise of 0.4 per cent during the first three months of the year. The magnitude of the fall was initially highlighted when recent GDP figures showed a 3.2 per cent decrease, the equivalent of £500 million.

Andrew Duncan, managing director of property at the global management consultancy Turner & Townsend, explained that there had been optimism at the beginning of 2013 following a brief "burst of growth" towards the end of 2012.

However, these positive feelings have been dampened by the latest results. One of the main drivers of these statistics was private commercial other new work, which is now down 38 per cent since its peak in 2008. It is quite significant considering it accounts for 22 per cent of total output and is now at its lowest point since the fourth quarter of 1997.

Simon Rawlinson, head of strategic research at EC Harris, said: "Activity fell in all new build sectors over the quarter. This is not a good sign, but much of this decline will have been weather related, and the monthly data from March shows a substantial rebound in private housing, infrastructure and commercial as contractors sought to make up for lost time."

The latest news comes in light of figures from the Civil Engineering Contractors Association Workload Trends Survey, which revealed that companies in the industry were regaining confidence. The study noted that there was a slight increase in optimism across England and Scotland with a positive balance of 12 per cent but it was much different story in Wales with 69 per cent of firms noting a drop in new orders.

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Date: 13/05/2013 16:12:00

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