ONS: November sees two per cent drop in construction output

Allan Callaghan
Allan Callaghan

Construction output in the UK fell by two per cent in November compared to the previous month, according to today’s figures from the Office for National Statistics (ONS).

While November’s output was up 3.6 per cent on the same time last year, overall construction output also declined month-on-month in the previous month of October, down 2.2 per cent compared to September.

All new work and repair and maintenance (R&M) were said to have contributed to the fall.

R&M was the largest contributor to the fall, decreasing by 4.5 per cent. All work types except public housing R&M reported decreases, notably non-housing R&M which fell by 6.0 per cent and private housing R&M which fell by 4.1 per cent.

All new work decreased by 0.4 per cent, with all types of new work except private new housing and infrastructure reporting decreases: public other (-2.7 per cent),

Commenting on the latest figures, Michael Dall, lead economist at construction intelligence specialist, Barbour ABI, said: “The slight decline in output reported today is unsurprising and reflects the fact that activity slowed towards the end of 2014. Despite this fall, the housing market remains a strong driver over the longer term, although it is notable that the pace of growth within this sector has also slowed in recent months. Activity should remain in housing, albeit at a more moderate level, as the key fundamentals hold fast including low interest rates and the Government’s first time buyers support schemes such as Help to Buy.

“According to our latest data, the industry should benefit from sustained investment in residential and commercial projects, and there is evidence that some major infrastructure projects will commence, including those signalled in the recent Autumn Statement. Combined, these suggest that the construction industry continues to grow but with less momentum.”

Allan Callaghan, managing director of Cruden Building & Renewals, the long term picture of steady year on year growth “mirrors Cruden’s buoyant performance, with notable successes in the number of construction tenders won on price and quality, creating affordable housing in Scotland”.

He added: “Every industry faces its challenges however, and the growing skills gap within this sector needs to be plugged. Whilst Cruden has a strong pipeline of approximately 50 modern apprentices employed at any one time, we plan to grow this figure this year by 30 percent to help tackle this issue.

“With a healthy order book, upturn in the housing market and growing staff numbers, Cruden looks forward to a successful 2015 in an industry that’s on a strong road to recovery.”

Managing director of Kier Construction’s Scotland & north-east England business, Brian McQuade, said that the statistics confirm steady growth in the Scottish construction sector.

He added: “2015 is shaping up to look strong for the Kier Group and the construction industry as a whole. Last year we increased our turnover by 51 per cent on the previous year and all the signs point to another year of growth.

“A substantial proportion of Kier Construction’s workload is coming from both UK and Scottish Government supported projects and we have secured positions on major frameworks in our target market sectors of health, defence and education. This has only further cemented our very strong order book. .

“Today’s ONS report points towards an optimistic year ahead and this is in step with what we are witnessing. We have recently recruited more employees to meet growing demand, we have a robust pipeline of work for 2015 and a number of exciting new projects on the horizon.”

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