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Is UK construction output declining?

NCE stock business

The UK construction industry is experiencing a serious slowdown in output, according to new figures released today.

The government’s Office for National Statistics (ONS) has released its latest statistics which show construction output decreased by 1.1% in the first quarter of 2016 compared to the last quarter of 2015.

The statistics report output in the industry dropped 3.6% in March 2016 compared with the previous month.

Construction output also decreased by 1.9% between the first quarter of 2015 and the first quarter of 2016, according to the figures.

In a statement, the ONS said the main contributions to the decline came from a contraction in non-housing repair and maintenance, while private commercial work and infrastructure also fell.

However, KPMG partner and head of infrastructure building and construction Richard Threllfall dismissed the figures and claimed they are not in line with the strong demand in the civils market.

“Apologies ONS, but I just don’t believe today’s output figures. They don’t ring true with what the industry is experiencing on the ground, with strong demand across all segments and growing order books,” he said.

“Yes, the housing sector had a weaker than expected start, but is warming up nicely in the spring sunshine, and the civils market remains very strong thanks to pipelines of activity in road and rail. Sweepstake, anyone, on how long before we see an upward revision of the numbers?”

Despite the alleged slowdown, the ONS reported new housing output increased by 4.8% in the first quarter of 2016 compared to the fourth quarter of 2015.

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