Backlash as ONS points to construction recession

Construction economists have questioned the accuracy of Office for National Statistics (ONS) construction output figures, after the organisation’s latest figures suggested the sector entered recession at the start of 2015.

Latest ONS construction output figures, out today, suggest output in the sector decreased by 1.1% over the first quarter of this year, compared to the previous quarter.

According to the ONS, construction output has declined for two successive quarters, after also declining in the fourth quarter of 2014, technically putting the sector in recession.

Reacting to the latest figures, economists at the Construction Products Association (CPA) issued a statement querying the ONS’ construction output figures.

The CPA said: “The CPA points out, however, that the official data contradicts a growing body of recent evidence from itself and other industry sources. Several independent organisations, including Experian and Markit / CIPS, have similarly reported growth in construction activity.

“These findings were reinforced this week by the Bank of England, which published its latest Inflation Report highlighting concerns with the comparative figures.

“The CPA originally wrote to the ONS to raise this issue following the release, in April, of the original Q4 estimate. The CPA and ONS met in early May, and are currently working together to address this matter.”

The ONS’s latest figures, suggesting a 1.1% decline in output over the first quarter, was slightly smaller than its previous estimate which suggested a 1.6% decline, published alongside its overall economic output figures last month.

The upward revision was prompted by the ONS receiving more data. After declines in output in January and February, output rebounded to grow 3.9% in March, the ONS said.

Over the quarter new work fell by 1.7%, while total housing, other public work and private commercial works were down 3.4%, 6.6% and 3.0% respectively on the quarter.