Construction output fell in January

ONS figures show that less work was done in January than in December, despite the effects of the cold weather towards the back end of 2010.

During January the value of construction output was £6.9bn, compared to £7.5bn in December.

January’s figures are not significantly higher than in January last year, when construction output was £6.6bn and the industry was also hit by severe weather.

Commenting on the figures, economist Brian Green said: “If the data provide an accurate representation of what is happening in the industry they are very worrying indeed. Where we would have expected a bounce in January as firms caught up on delayed work, we appear to have a drop.The most likely explanation is that there is a lag effect. That is to say the figures filled in for January in part represent what happened in December. And this is highly likely if the data used by responding firms was based on invoices sent in the month.”

But a note of caution was sounded by Noble Francis, economics director at the Construction Products Association, who said: “There must be a significant lag in the output stats as December and January are both down (potentially representing the bad weather in November and December). As a result, I believe that February’s output stats will be sharply up.

“This data published today isn’t seasonally adjusted and that will upgrade the output figures for January, while late responses will also end up boosting output for January. The revisions in this data go back to January last year.”