New orders in private housing fell over 17% in Q2

September 10, 2018 / Isla MacFarlane
New orders in private housing fell over 17% in Q2

The latest figures show that new housing continues to prop up construction output, despite a fall in new orders.

Construction output grew 0.5% in July 2018, driven predominantly by a 4.0% increase in new private housing work, according to ONS data.

Construction output continued to recover following a relatively weak start to the year, increasing by 3.3% in the second quarter of 2018.

However, total construction new orders declined 6.5% in Quarter 2 2018, decreasing for the third consecutive quarter, reaching its lowest level since Quarter 1 2013.

The fall in all new orders has been driven by the decrease in new housing new orders, which fell by 17.6% in Quarter 2 2018, albeit from its highest level since Q3 2007.

This contraction was driven by a fall in the value of private housing new orders, which more than offset the rise in public housing contracts.

Compared with the previous month, construction output increased by £68 million in July 2018. The most notable increase came from private housing new work, which increased by £118 million in July 2018, this more than offset the £40 million fall in public housing, which decreased following strong growth in June 2018.

Following the month-on-month growth in July 2018, construction output has reached a record monthly level, surpassing the previous high seen in the previous month. As a result of the growth in July 2018, construction output is now 30.9% above the lowest point in the last five years, seen in July 2013.

Following four consecutive months of contraction in the month-on-month series at the start of 2018, construction output has increased in the latest three months. Following growth of 2.9% in May 2018 and 1.4% in June, construction output increased by 0.5% in July 2018. The month-on-month rise in construction output in July 2018 stemmed from an increase in all new work, which increased by 1.0% compared with June 2018.

In comparison with July 2017, construction output grew by 3.5%. The most notable contributions to month-on-year growth came from infrastructure and private housing new work, which grew by 11.5% and 10.4% respectively.

As a result of the 6.5% fall in all new orders in Quarter 2 2018, the value of all construction new orders fell to £10,801 million. The value of new housing new orders contracted from its highest level since the economic downturn in the previous quarter, decreasing to £3,552 million.

Compared with Quarter 2 2017, total new orders fell by 7.4% in Quarter 2 2018. In contrast to the quarter-on-quarter series, the quarter-on-year fall was driven by a decrease in all other work new orders, which decreased by 10.1% compared with the same quarter in 2017.

The overall fall in total new orders occurred as a result of decreases across all but one sector – public new housing – with notable declines in public other work and private commercial new orders, which fell 18.0% and 11.6% respectively.

Despite the decrease in new orders in both the quarter-on-quarter and quarter-on-year series, the most recent four quarters on a year earlier series experienced a 3.0% increase, with growth in both all new housing and all other work.


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