The latest ONS data
published shows that construction output contracted 1.3% in the second quarter
of 2019, reversing the 1.4% growth recorded in Q1 and contributing to a fall in
UK GDP, along with the manufacturing sector.
On a quarterly
basis, output fell in all sectors except commercial, public housing and public
housing repair, maintenance and improvement. On an annual basis, Q2 output was
1.4% higher, led by housing and infrastructure.
Rebecca Larkin,
Senior Economist at the Construction Products Association, commented: “The
sharpest decline in construction activity was the 0.7% monthly fall in June, as
a result of unseasonably bad weather delaying work on-site, particularly in the
RM&I sectors, which account for around one-third of overall output.
"However, even
though construction lost £521 million in output compared to Q1, the volume of
activity was still higher than a year ago. This was driven by clear pockets of
activity in house building by housing associations and local authorities, with
public housing output reaching a record high level in Q2, and although output
fell in quarterly terms for private housing and infrastructure, output from
these sectors remains at a historically high level.
"The
performance of other sectors such as commercial offices and retail, industrial
factories is less convincing against the backdrop of Brexit uncertainty that
complicates decision-making on investments with a high up-front outlay.”
Meanwhile
the CBI has responded to the latest GDP
figures showing that the UK economy shrank by 0.2% in the second quarter of
this year.
Alpesh Paleja, CBI
Lead Economist, said: “The contraction in economic activity over Q2 is
concerning, but much of this is due to a number of one-off factors.
“Growth has been
pushed down by an unwind of stockpiling and car manufacturers shifting their
seasonal shutdowns.
“Nonetheless, it’s
clear from our business surveys that underlying momentum remains lukewarm,
choked by a combination of slower global growth and Brexit uncertainty.
“As a result, business
sentiment is dire.
“Securing a Brexit
deal before the October 31 deadline is the first step to revving up the
economy. The second is re-focusing attention on vital domestic priorities –
such as pressing ahead with key infrastructure projects – to boost productivity
and growth potential over the longer-term.”
