Construction output drops 4.3% in August

In August 2015, output in the construction industry decreased by 4.3% compared with July 2015 and by 1.3% compared with August 2014 - the first year-on-year fall since May 2013 according to ONS statistics.

Related topics:  Property
Rozi Jones
9th October 2015
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All new work decreased in August 2015 compared with July 2015 by 3.6%, while repair and maintenance decreased by 5.6% over the same period.

Comparing the 3 months, June 2015 to August 2015, with the previous 3 months, March 2015 to May 2015, construction output fell by 0.8%. Repair and maintenance decreased by 3.6% while all new work increased by 0.7%.

However compared to the same 3 months a year ago, construction output was estimated to have increased by 1.8%. All new work increased by 5.6% while repair and maintenance decreased by 4.6%.

The Quarterly National Accounts published on 30 September 2015 included an estimate of construction output for Q2 2015 of 1.4%, this was an upwards revision to the estimate included in the second estimate of GDP for Q2 which showed an increase of 0.2%.

Stephen Wasserman, director of West One Loans, said:
 
“In a week when we have again heard the Prime Minister address the UK’s housing shortage, the statistics show that, as a nation, we are talking the talk but failing to walk the walk. Construction activity is not only down on a monthly basis, but has fallen on an annual level for the first time in more than two years.

“David Cameron’s pledge earlier this week to build 200,000 starter homes by 2020 was welcome news on the face of it, but it’s a drop in the ocean when you consider we actually need that number of new homes on an annual basis to address the supply shortage that has plagued the nation for decades.

“One of the most interesting aspects of Cameron’s speech was the flexibility that will be given to developers in terms of affordable housing obligations, but for many builders it is funding that has long proved the obstacle. Bridging lending in particular has long proved a valuable source of short-term finance for developers securing land and getting projects off the ground, but mainstream providers need to step up to the plate too.”   

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