Construction output
fell more steeply than previously estimated in the three months through
September, driven by a drop in commercial work and housing repairs.
The latest data from
the Office for National Statistics show a second consecutive quarter of
declining activity in the sector.
It suggests that
uncertainty about post-Brexit trade arrangements is affecting companies'
long-term investment decisions, while accelerating inflation is squeezing
consumers, making them pare back non-essential spending.
The industry's
output fell by 0.9% on the quarter in the July-September period, the largest
quarterly decline in five years, the ONS said. The decline in the industry,
which accounts for some 6% of the UK
economy, was previously estimated at
0.7%.
Rebecca Larkin,
Senior Economist at the Construction Products Association, said that at a
headline level, the new data shouts "construction recession", which
she says is marked by two consecutive quarters of falling output. However,
output remains at relatively high levels – 1.1% higher than a year ago and 7.1%
higher than 2015 Q3.
“There is also a
clear variation in performance by sector, as highlighted in the CPA’s
forecasts," she added.
"Private
housing output rose 1.8% to a record high during the quarter, with demand and
confidence sustained by the Help to Buy equity loan. The £10 billion extra
funding for the policy announced last month will maintain impetus in house
building, with greater certainty over affordable rent-setting also supporting
building by housing associations.
“Nevertheless, areas
of weakness include private commercial, where new orders have fallen for three
quarters and signal a lack of offices and retail projects to replace those now
coming to an end. This is echoed in the public non-housing sector, which is
suffering from lower volumes of work on schools and a dearth of new large
hospitals projects.”
Separately, new
figures showed a widening of the U.K. trade deficit in goods in the third
quarter, a sign that a hoped-for post-Brexit vote rebalancing of the economy
away from consumption and toward trade has yet to materialize.
Britain
imported GBP9.5 billion ($12.5 billion) in goods more than it sold to the rest
of the world in the three-month period, the ONS said, a widening of GBP3.0
billion compared with the preceding quarter.
