The latest ONS
figures show that construction output in October fell by 1.7% and was 0.2%
lower compared with one year earlier.
New orders in Q3
rose 37.4% over the quarter and 25.5% on an annual basis.
Rebecca Larkin,
Senior Economist at the Construction Products Association, said the latest data
confirms that previous falls in new orders over the last twelve months are
beginning to translate into lower construction activity in the commercial and
public non-housing sectors.
"In addition,
output in private housing RM&I, the third-largest sector, has now fallen
for two consecutive months and taken in conjunction with the recent decline in
new car registrations, suggests consumer willingness to spend on big-ticket purchases
is being constrained by the fall in real wages," she added.
“With regards to new
orders in Q3, the strong headline growth rate was driven by infrastructure,
reflecting the award of phase one contracts for HS2, a project worth £55.7
billion overall. As the ONS points out, new orders growth rates this high were
only previously recorded when contracts for the Channel Tunnel were awarded in
1987. This aligns with the CPA’s forecast of infrastructure as the primary
driver of output growth over the next two years.
“Excluding
infrastructure, new orders rose 4.1%, including a 35.4% increase in public
housing, to the highest in three years as work accelerates under the Shared
Ownership and Affordable Homes Programme. However, the data for new orders
signals that the weakness in the commercial and public non-housing sectors is
likely to continue.”
