News - Construction News

ONS: construction markets contracting but still remain at high levels

Figures for the three months to July, released by the Office of National Statistics this week, show that the construction market has contracted by 1.2%.

The latest figures reveal a three-month trend of decline, but markets are remaining at high levels. The biggest declines were shown in the repair and maintenance arenas, with a 1.8% drop, and new work dropping to one per cent.

Construction output also fell month-on-month, falling by 0.9% in July 2017, predominantly driven by a 1.4% fall in all new work.

This latest three-on-three month fall in output is the fourth consecutive fall in figures for the industry. However, the market remains buoyant under difficult political and economic circumstances and trading at relatively high levels in comparison to struggling markets. Construction output peaked in January 2017, reaching a level that was 24.9% higher than the lowest point of the last five years, January 2013. Despite falling in July 2017, construction output remains 21.0% above this level.

In direct contrast to the government drive for new housing, decline in output was broadly driven by falls in private housing and infrastructure. Following strong growth in June 2017, private housing fell by £95M, representing the main downward pressure on construction output.

However, public housing boosted the figures with a £18M increase compared with June 2017. Elsewhere, both private commercial work and non-housing repair and maintenance recovered from falls in June 2017, with private commercial work growing by £7M and non-housing repair and maintenance expanding by £6M. Infrastructure continued to fall, dropping for the third consecutive month, by £38M.

Further depressions in figures are shown in public other new work, which fell 6.6% in July 2017.

New orders also fell quarter-on-year, decreasing by 12.6% compared with Quarter 2 2016. All sectors, bar private industrial, fell in comparison with the same period in the previous year. However, it must be noted that Quarter 2 2016 was a record high for new orders. More worthwhile comparisons can be drawn from the most recent four quarters on a year earlier series, where all new work is down 1.0%, driven by a 4.2% fall in all other work.


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