Construction output contracts for third consecutive quarter

Construction output contracts for third consecutive quarter

Construction output continues to fall, however private housebuilding remains a bright spot and output remains at historically high levels, according to the latest ONS data.

Construction output fell 0.7% during the three-month on three-month period to December 2017, representing both the eighth consecutive three-month on three-month fall and the third consecutive quarter-on-quarter decline in output.

Construction output grew sharply month-on-month, increasing by 1.6% in December 2017 and remains at a relatively high level. Construction output peaked in March 2017, reaching a level that was 31% higher than the lowest point of the last five years, January 2013.

Following the month-on-month increase in December 2017, construction output is now 30% above this level.

Despite experiencing three consecutive quarterly declines, construction output in Great Britain grew by 5.1% in 2017 due to strong growth at the end of 2016 and in Quarter 1 (Jan to Mar) 2017.

Construction output fell by £283 million in the three-month on three-month time series in October to December 2017 compared with July to September 2017. This decrease stems from falls across all but two sectors. The most notable decline came from private commercial work, which continued the decline seen in this series since June 2017, falling by £324 million.

In contrast, private housing continued to make a notable positive contribution to growth. The £403 million increase in private housing work, which represents the fifth consecutive month of growth in this series, has led to the value of private housing work reaching its highest level on record.

Construction output experienced a sharp increase in December 2017, increasing by £201 million compared with the previous month. This increase has been driven primarily by a marked rise in infrastructure, which increased by £169 million after a broadly negative 2017.

Private housing also continued to expand, increasing by £81 million compared with November 2017.

Total all work increased to £13,058 million in December 2017. This rise stems from an increase in total all new work, which grew to its highest level on record; £8,593 million.

Compared with the same period in 2016, construction output fell by 0.2%. This month-on-year fall was driven predominantly by a 3.2% fall in total repair and maintenance. By contrast, all new work continued to grow month-on-year, with increases in new private housing and infrastructure more than offsetting declines in private commercial and public other new work.

Positive growth is also evident in the three-months on year time series, with construction output continuing to increase by 0.9%, representing the weakest three-months on year growth since June 2013. This increase stemmed from growth in all new work, which continued to grow, increasing by 1.4%.

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