Construction output suffers record fall

Construction suffered its worst ever fall in output in the first quarter of 2009, new figures from the Office for National Statistics have shown.

The data, released today, showed that total output in construction fell an unprecedented 16% compared with the same quarter a year earlier. The drop is the sharpest fall on record.

Private housing output in the first quarter of 2009 was 32% down on a year earlier.

The Construction Products Association (CPA) warned that despite recent news from Halifax, Nationwide and RICS suggesting a slight recovery in the housing market, it will take time for this to feed through into actual output, particularly with Q1 2009 new orders 50% lower than a year earlier.

Noble Francis, economics director of the CPA, said: “These figures confirm the seriousness of the downturn that is facing the industry. A large number of jobs has already been lost and there is clearly a lot of pain still to be had.”

Other figures from the report showed that industrial new build had its largest fall on record, dropping 40% compared with a year ago. New orders in the industrial sector fell 62% in the first quarter of 2009 compared with a year earlier, and industrial output is expected to fall further during 2009.

Output in the commercial sector fell by 26% in the first quarter, while public housing fell 12%. Even in infrastructure, which the industry had hoped would be buoyed by significant workloads in rail, output was 5% lower than a year earlier.

Public non-housing rose by 7%, however, boosted by work in education and health, although the CPA said the state of public finances could create “serious concerns” on public funding for construction in the medium term.

“With the industry facing such gloomy prospects,” Francis said, “it is essential that the government recognises the urgency of the situation and ensures that these announcements feed through to actual work on the ground.”