Construction enters recession, says ONS

Construction has entered recession despite the overall UK economy unexpectedly growing, according to the latest ONS output figures.

The ONS’s first estimate for second quarter growth put the UK’s overall growth at 0.6%, but construction registered a 0.4% decline.

It was the second successive quarter of construction output decline, after a 0.3% fall in the first quarter, putting the sector technically in recession.

The second quarter covers the months of April, May and June, with the EU referendum on 23 June falling towards the end of the period.

The news comes after civils firms yesterday reported growth in infrastructure had “ground to a halt” because of uncertainty sparked by the EU referendum, according to a CECA survey.

Industry leaders had warned the sector was likely to enter a recession due to uncertainty surrounding the EU referendum and urged Theresa May’s government to act swiftly to avert a prolonged downturn.

Brian Berry, chief executive of the FMB, commented: “The construction industry has grown steadily over the past few years and for the sector to experience two consecutive quarters of negative growth demonstrates the powerful effect uncertainty and a lack of confidence can have.

“The government must now take bold action and do everything in its power to prevent these preliminary estimates by the ONS from becoming more concrete or sustained.

“A firm commitment to invest public funds in capital projects such as house building and infrastructure would go a long way to assuaging fears that demand will dive in the wake of Brexit.”