Construction output lowest for 15 years

Construction output sank to its lowest level for nearly 15 years in the first quarter of 2013, according to the latest government figures.

The Office for National Statistics said output in Q1 dropped by 2.4% from Q4 of 2012, and was 6.5% lower than the figure for the same period a year ago.

The ONS said the quarterly volume of construction output was now estimated to be at its lowest level since Q4 1998, with private commercial work now 38% below its peak in 2008.

The quarter on quarter fall of 2.4% was marginally less steep than the prediction contained within the overall UK GDP figure published in April. This assumed a 2.5% fall in construction output.

Most of the fall was accounted for by new work, which dropped 3.2%, with repair and maintenance work falling less sharply. Within this the sharpest sectoral fall was for government funded building work, which fell 7.5% on the previous three months, almost a fifth lower than a year before.

Housebuilding, both public and private, also showed substantial falls, of 4.1% and 3.7% respectively when seasonally adjusted. The only sub sector to show an increase was private housing repair and maintenance, up 0.4%.

Andrew Duncan, managing director of property at consultant Turner & Townsend, said the numbers showed the “high hopes” of early 2013 had been dashed. He said: “The numbers are now truly dire - and the construction industry will surely reclaim its position as the fall guy of the British economy.

“With total output now lower than at any time for nearly a decade and half, the news is bleak across nearly all sectors of the industry. The government’s hopes of the private sector pumping desperately needed money into infrastructure and helping the economy build its way to recovery look more improbable by the day.”