ONS: July construction output flatlines

John Hewitt Jones

September 9, 2016

housing construction

Construction output showed no growth in July compared with the previous month, according to figures published by the Office of National Statistics (ONS).

UK construction output for July 2016 flatlined at 0.0% growth.

Compared with July 2015, construction output decreased by 1.5%. All new work, and repair and maintenance decreased by 0.6% and 3.2% respectively.

Construction output slows by 1.5%

The underlying pattern as suggested by the three-month on three-month movement in output in the construction industry decreased by 1.2%.

New orders for the construction industry in Quarter 2 (Apr to June) 2016 were estimated to have increased by 8.6% compared with Quarter 1 (Jan to Mar) 2016 and increased by 7.5% compared with Quarter 2 2015.

New housing increased by 25.0% while there was a fall of 17.4% in infrastructure.

There was an upwards revision of 0.6 percentage points to construction output in Quarter 2 2016 to -0.1%, this has no impact on GDP to 1 decimal place.

Nick Vaughan, director of economic statistics at the ONS, said: “Construction output remained steady in July with growth in infrastructure offset by falls in repair work and commercial buildings.

“There was strong growth in construction orders, led by housing, after nearly two years of orders remaining relatively flat.”

Andrew Bridges, managing director of Stirling Ackroyd, said: “We’re not out of the woods yet. Despite the positive consumer data we’ve seen in the weeks and months since Brexit, it’s clear that construction output and housebuilding is flat-lining.

“The Bank of England’s decision to halve interest rates has helped to balance the ship in the very short term, but it is still too early to say what the longer-term impact of June’s referendum will be on housebuilders, the property market and the wider economy.

“We must not allow Brexit to distract from the urgent need to build more homes, especially in London and the South East, which are both facing an intense housing shortage. The Chancellor’s Autumn Statement must give housebuilders the confidence to get on with tackling this fundamental issue in our society and extend opportunities for first time buyers, such as Help to Buy. As a former property developer, the industry will be expecting Phillip Hammond to step up to the plate and back housebuilders.”

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