Output for UK Construction industry falls in November 2015

According to recent figures from the Office for National Statistics, the output for the UK Construction Industry fell towards the end of last year. ‘Output’ is defined as the amount charged by construction firms to customers for the value of work (produced during the current reporting period) excluding payments to contractors and VAT.

Output for UK Construction industry falls in November 2015

The figures from the first half of 2015 indicated a positive outlook however a drop in output throughout summer and autumn extended into the winter months and resulted in a 1.1% decrease in output, the largest drop since May 2013.

There was an estimated decrease of 0.5% in Construction output in November 2015, compared with October 2015. Housing repair decreased by 0.2% while all new work was the largest contributor to decrease, by 0.7%. Overall figures for the output of the Construction Industry dropped by 1.1% compared to November 2014.

Construction output estimates are a short-term indicator of construction output by private sector and public corporations within Great Britain. Download the full report here.

Key findings from the ONS regarding Construction Output in November 2015:

  • In November 2015, output in the construction industry was estimated to have decreased by 0.5% compared with October 2015. All new work was the largest contributor to the fall, decreasing by 0.7%, with repair and maintenance (R&M) falling 0.2%
  • Within new work, there were increases in public other (2.3%), private industrial (1.7%) and total housing (0.9%). However, these were offset by decreases in infrastructure and private commercial work of 4.3% and 1.5% respectively.
  • Repair and maintenance (R&M) decreased by 0.2% with decreases in both components of housing repair and maintenance; private falling by 1.3% and public by 0.7%. Non-housing repair and maintenance increased by 0.8%.
  • Compared with November 2014, output in the construction industry decreased by 1.1%. All new work increased by 1.3% while there was a fall of 5.1% in repair and maintenance. The main upwards contribution to all new work came from infrastructure which increased by 11.7%.
  • Comparing the 3 months, September 2015 to November 2015, with the previous 3 months, June 2015 to August 2015, construction output fell by 1.4%. All new work and all repair and maintenance decreased by 1.4% and 1.2% respectively.
  • When comparing the 3 months, September 2015 to November 2015, with the same 3 months a year ago, construction output was estimated to have decreased by 0.1%. All new work increased by 2.4% while repair and maintenance decreased by 4.3%.
  • The only period open for revision is October 2015, this estimate is unchanged. More information on revisions can be found in the background notes.

Britain’s builders experienced the unexpected dip in output throughout November despite predictions for an increase of 0.5% in a Reuters poll of economists. The ONS said that the bad weather may have had an impact upon the construction industry which accounts for 6% of the economic activity in Britain. The heavy rain and flooding had a huge impact throughout the UK during the month of November, largely throughout the building trade according to ONS figures.

In order to avoid a fall for the fourth quarter as a whole, December’s construction output report would need to increase significantly.

ONS

 

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