Construction industry experiences sudden decline in output

Contrary to analysts’ predictions, UK construction output fell by 1% in July on the month, reversing a 0.9% increase seen in June, and going against the forecasts of a 0.5% rise, latest figures from the Office of National Statistics reveal.

Compared with 2014, annual construction output in the UK fell by 0.7%, again disappointing economists’ forecasts of a 0.6% rise.

The main factor behind the fall is reported as being a year on year decline in the construction of new housing, which fell by 2.5%, the first decline since March 2013.

In July of this year, all new work decreased by 1.5%, while all repair and maintenance showed no growth, and within all new work there were falls in all work types except infrastructure and private industrial works.

Decreases in public new housing, private new housing, public other new work and private commercial work were apparent, the figures pointing to falls of 5.8%, 2.0%, 4.5% and 2.9% respectively.

Within the repair and maintenance (R&M) category, the growth in non-housing R&M of 1.4% was offset by a decrease of 1.4% in housing R&M.

When compared to July 2014, construction industry output has fallen by 0.7%, the first year on year decrease in construction output since May 2014, when output fell by 2.8%.