Construction output falls for third month in a row

Kier construction stockOutput in the UK construction sector has fallen for the third month in a row despite an increase in new housing.

Figures released today by the Office for National Statistics (ONS) show overall construction output was 0.7% lower in March, with the monthly fall worse than previous estimates.

While new housing experienced strong growth in March, increasing month-on-month by 3.8%; month-on-year by 5.4%; and quarter-on-quarter by 0.2%, the activity failed to completely outweigh lower spending on infrastructure, repairs and maintenance.

The quarterly figure was somewhat brighter, with output up 0.2% during the first three months of the year.

In comparison with the same period in 2016, construction output grew by 2.4% in March 2017, representing the 12th consecutive period of month-on-year growth.

Repair and maintenance was the main drag, shrinking both month-on-month and quarter-on-quarter by 1.8% and 0.2% respectively. Spending on infrastructure fell by £78m.

Partnership housing developer Lovell said the figures underline the continued strengthening performance in house building in Scotland and throughout the UK.

Stephen Profili
Stephen Profili

Recently appointed regional managing director for Lovell in Scotland, Stephen Profili, said: “2016 was a good year for the house building sector in Scotland with public and private sector output both up year-on-year, as was repair and maintenance activity in the housing sector. For its part, Lovell built 277 open market and affordable homes in Scotland last year. These new figures for March 2017 show promising performance for the industry during the first quarter of 2017 – and the housing sector in particular is continuing to perform strongly, demonstrating an ongoing recovery from the 2008 recession.

“Lovell is gearing up for a busy year with a strong pipeline of projects across central Scotland approaching completion and ready to launch for sale in the coming months and a number of others entering the construction phase. Working with a range of local partners, we expect to deliver approximately 450 units of new housing during 2017 including around 400 affordable homes, making an important contribution to the Scottish Government’s target to build 50,000 new affordable homes by 2021.”

Allan Callaghan
Allan Callaghan

Allan Callaghan, managing director of Cruden Building & Renewals, added: “These positive figures come at a time where the sector is traditionally at its most productive, with the longer, drier days supporting increased work on the ground.

“Housebuilding has definitely been the jewel in the crown for construction output during the first quarter and with continuing demand for modern and affordable housing across the country, I would expect this trend to continue in the coming months.

“The Scottish construction sector has faced many challenges but those operating in the industry have the drive, desire and talent to face them head on. Now is the time for the housebuilding sector to make hay while the sun shines, driving future construction growth and ensuring we see positive statistics in the coming months.”

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