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Construction output down 0.2% as new work falls 2.4% in September

Construction output fell 0.2 per cent in September after new work declined 2.4 per cent month on month, according to the Office for National Statistics.

September’s output was the lowest recorded by volume since May 2014 and was 4.9 per cent below the 2015 high-point of April.

New work fell 2.4 per cent compared with August, although this was partially offset by a 3.8 per cent rise in R&M work.

Housing also posted a recovery of 1.1 per cent in September, after two consecutive months of decline.

Private housing output grew 0.4 per cent, while public housing output saw an increase of 4.5 per cent – the largest month-on-month increase of any new work sector.

Infrastructure recorded another month of decline, falling 6.2 per cent in September compared with August. This followed a fall of 4.1 per cent the previous month.

The ONS also revised previous data, with July’s month-on-month fall of 1 per cent revised down to a fall of 1.2 per cent.

Results for August were also updated, with a previous decline of 4.3 per cent revised upwards to a decline of 3.4 per cent.

The ONS said these revisions were due to “the incorporation of late data”.

The organisation also confirmed that its earlier estimate that construction output fell 2.2 per cent in Q3 2015 compared with Q2.

Broken down by sector, quarterly data showed that public housing output fell 12.6 per cent in Q3 from Q2, while public other new work and private commercial work were down 5.5 per cent and 2.6 per cent respectively.

Private industrial output however grew 8.9 per cent quarter on quarter to record its highest output reading since Q3 2008.

Despite the 2.2 per cent fall in overall output during Q3, new work was still at its second-highest level since Q1 2008.

Commenting on the data, Mark Robinson, chief executive of Scape Group, said: “Although the ONS has shown an overall fall in output of 2.2 per cent in the last quarter, the view on the ground has been more positive – the CIPS/Markit PMI data from the past few months has consistently shown that contractors are optimistic, with new orders coming in and a strong pipeline of projects.

“This is exactly the longer term view we need to take.

“Building the new homes and supporting infrastructure that Britain needs will require greater collaboration and innovation across the sector, as well as better skills training and reform of the planning system to allow quick and strategic decision making.

“Public sector work is a crucial part of the construction industry, and with the November Spending Review and Autumn Statement coming up later this month, the government should seize the opportunity to support key building projects.”

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