ONS reports largest output fall since seventies

The construction industry last year saw the largest year-on-year fall in output since the seventies, the Office of National Statistics confirmed today.

Fourth quarter figures for 2009 showed output dropped by 11% across the whole year on 2008, to £97.2bn at 2005 prices. This is the first time the figure has fallen below £100bn since 2002. In the last quarter of 2009 output fell a further 1% on the previous quarter. Falls in the volume of repair and maintenance work more than outweighed a small increase in new-build work.

Bright spots were infrastructure, with output at the end of 2009 up 15% on the previous quarter, and public housing, where output was up 14% quarter-on-quarter. However output dropped in private commercial building, down 8%, and on housing repair and maintenance, down 9%.

Michael Ankers, chief executive of the Construction Products Association, said: “Today's figures illustrate the dramatic impact of the recession in which some experts estimate up to half a million jobs have been lost over the last two years. The only thing that has prevented the industry from suffering an even more dramatic downturn has been the continued high level of public spending on construction.”

Public spend on construction grew by 8% in 2009 compared with a collapse of 20% in spending by the private sector.

RICS chief economist Simon Rubinsohn said: “The data continues to highlight the ongoing strain on the hard pressed construction sector. The strongest contributions came from those areas most closely aligned to the public sector, something mirrored in our own construction survey; however comments from our members point towards a faltering in the capital spending programmes as we approach the general election. With the more subdued trend in private sector workloads this casts some doubt on just how sustainable any improvement in the construction sector is likely to prove as attention turns to scaling back the budget deficit in the wake of the general election."