Office of National Statistics reports £2.6bn was spent in August, compared with £3.1bn in July

Construction orders fell by 17% in August because of a sharp drop in infrastructure and non-housing public spend, according to the latest government figures.

Seasonally adjusted figures from the Office of National Statistics said there was £2.6bn of spend in August, compared with £3.1bn in July. This was primarily because of a drop of 30% in infrastructure spend, to £707m, reversing the sharp rise in the previous month. In addition, public non-housing spend fell from £899m, to £657m, a drop of 27%.

The figures mean orders in the last 12 months are now almost a quarter lower than in the previous 12 month period. The only bright spots were rises in public housing spend, and orders for private industrial and commercial space.

Brigid O'Leary, RICS senior economist, said the weakness in the August numbers meant the construction sector was increasing relying on public housing spend, which now accounted for about 11% of total new orders, up from 4% in January 2009. She said: “While this is providing some support in the short-term, the outlook is still quite subdued - whoever wins the next election is likely to scale back public sector investment, while limited development finance will constrain private sector activity. Any recovery in the construction sector is going to be very gradual."

All orders figures are in constant 2005 prices.

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