Construction output drops by 1.3% in Q2

Michael Lloyd

August 9, 2019

Construction output dropped by 1.3% in Q2, partly due to a fall in private housing repair and maintenance, the ONS’s Construction Output data has showed.

The decrease was driven by a fall of 2.6% in repair and maintenance in Q2, which was largely because of the 6% decline in private housing repair and maintenance, with a smaller contribution from the 0.9% fall in non-housing repair and maintenance.

Blane Perrotton, managing director of the property consultancy and surveyors Naismiths, said: “Bad just turned into worse.

“Finding good news in this unrelentingly bleak snapshot of the construction industry in the second quarter is needle in a haystack stuff.

“The brief flurry of stockpiling seen in the run up to March now feels like a lifetime away.

“Stripped of that crutch, the second quarter brought pain upon pain. New work in the public sector plunged by more than a tenth, the largest quarterly fall ever seen.

“Private sector housebuilding – once a rare bright spot in an industry under siege elsewhere – saw its decline accelerate, and the omens for the future aren’t good either.

“With the forward-looking PMI suggesting that new orders are drying up and sentiment is on the floor, construction could soon be in a race with manufacturing for the unwanted accolade of being the first sector of the UK economy to enter recession.

“At this rate, that is one of the few things that will be achieved by October 31.”

In new work, the decrease of 0.5% in Q2 was driven by declines in public other new work and private new housing.

Construction output for private housing repair and maintenance, and private industrial new work dropped by £98m from May to June.

Andy Sommerville, director of Search Acumen, added: “UK construction continues to run, but nobody seems to know what on, or indeed, for how long.

“Elsewhere this week, experts have been discussing a potential crisis hitting the property market in 12 weeks’ time as UK markets continue to bristle with anxiety ahead of the Brexit deadline.

“A similar situation presents for the state of construction: it has slowed and the possibility that building might come to a standstill after October still looms large.

“A no-deal scenario is not of course the only outcome and construction may well get a new impetus once the industry knows how Brexit will turn out and is able to prepare accordingly.

“In the meantime, we mustn’t despair at the dampened activity and instead take August to rest, to regroup and prepare – if we play our cards right, we can land on our feet.”

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