Latest ONS figures show 1.3% decline in construction output

The latest ONS construction output figures have been described as a “grim outlook on the state of the construction industry” by public sector procurement organisation the Scape Group.

The figures show a decline of 1.3% in Quarter 2 (Apr to June), which Scape’s chief executive Mark Robinson described as continuing the “biggest quarter-on-quarter decline from the public sector since records began two decades ago,” and that “the economy continues to be affected by infighting in Westminster.”

The main points of the ONS report show that: 

• Construction output decreased by 1.3% in Quarter 2 (Apr to June) 2019, largely reversing the increase of 1.4% in Quarter 1 (Jan to Mar) 2019;
• The decrease was driven by a fall of 2.6% in repair and maintenance in Quarter 2 2019, which was due largely to the 6.0% decline in private housing repair and maintenance, with a smaller contribution from the 0.9% fall in non-housing repair and maintenance;
• In new work, the decrease of 0.5% in Quarter 2 2019 was driven by declines in public other new work and private new housing, with public other new work seeing its largest quarter-on-quarter decline since quarterly records began, with a fall of 10.9%;
• Construction output decreased by 0.7% in the month-on-month all work series in June 2019; this was due to a 2.0% decline in repair and maintenance along with flat growth (0.0%) in new work;

Mark Robinson, Scape Group chief executive, said: “The new data presents a grim outlook on the state of the construction industry, with a £521m drop in activity on the quarter. We have seen the biggest quarter-on-quarter decline from the public sector since records began two decades ago –  with local authorities both reluctant and unable to push forward with delivering new offices, schools, hospitals, surgeries and shops. 

“The stark reality is both the public and private sector are continuing to err on the side of caution and new work has flatlined. This decline in output is not restricted to new work though, with the repair and maintenance of private housing falling by a staggering £325m. 

“The possibility of a vote of no confidence being tabled when parliament returns in September continues to increase, with there being a very real chance that we will crash out of the European Union in October while an election campaign is underway. This scenario is completely uncharted territory, but one thing is certain our economy continues to be affected by infighting in Westminster, our competitiveness on the world stage is being damaged each month, and the appeal of UK plc is falling.”  

The new ONS data follows the PMI figures released earlier this month, which showed UK construction output had declined for a third consecutive month.