UK construction growth stalls

By Neill Barston13 March 2015

UK construction sector output results for January 2015 were down 3.1% compared with January 2014, according to latest figures from the Office for National Statistics (ONS).

This was the first year-on-year decrease since May 2013, when figures were down 2.8%. Results fell by 2.6% in January, compared with December, 2014.

This followed an improved performance in December last year, which had increased 0.6% over November. Fourth quarter growth in 2014 was 4.8% above the same period the previous year.

Output figures – which are defined as the amount charged by construction companies to customers for value of work (produced during the reporting period) excluding VAT and payments to sub-contractors – were estimated to have decreased by 2.2% for the final quarter of 2014, compared with the third quarter of the year.

ONS figures showed all types of construction work, except private industrial work had decreased in January, 2015, compared to the previous month. Private commercial work fell by 6.6%, infrastructure by 2.7%, and total housing by 5%, with public housing down 18.4% and private housing falling 1.3%.

Chris Temple, engineering and construction leader at PwC (PricewaterhouseCoopers), said, “Despite these latest figures, we continue to expect the sector to show solid, healthy growth during 2015.

“As we approach the General Election, it is possible that we will see a further temporary slowdown in new orders.

“However, we don’t expect that this will be significant enough to counteract the upward trend of growth for the year and there is still strong confidence in the sector for 2015 and beyond.”

He said the lack of large infrastructure projects being developed and uncertainty over the economy in Europe had been a negative factor for the short-term order books of construction firms.

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