UK construction shrinks in wake of Brexit
This post has already been read 2795 times!
UK construction has slipped away post Brexit with new figures from the Office for National Statistics (ONS) have shown a rocky path for the industry, with output falling by 1.1 per cent in the third quarter compared with a 0.1 per cent fall in the quarter before.
This is the first quarterly estimate for construction output covering data post-brexit-referendum. In Quarter 3 (July to Sept) 2016, output in the construction industry was estimated to have decreased by 1.1% compared with Quarter 2 (Apr to June) 2016.
Downward pressure on the quarterly estimates came from all repair and maintenance which decreased by 3.6%, partially offset by an increase in all new work of 0.3%.
The gross domestic product (GDP) preliminary estimate showed construction output decreased by 1.4%. The revision to a decrease of 1.1% has no impact on GDP to 1 decimal place.
Between Quarter 3 2016 and Quarter 3 2015, output was estimated to have increased by 0.1%. All new work increased by 2.0% while there was a fall of 3.4% in repair and maintenance.
In September 2016, construction output increased by 0.3% compared with August 2016. All new work increased by 1.2% while there was a fall in repair and maintenance of 1.4%. Users should note that we always warn against overly interpreting 1 month’s figures.
Figure 1: All work, Quarter 3 (July to Sept) 2016
Chained volume measure, seasonally adjusted, Great Britain
On the year, output increased by 0.2% in September 2016 compared with September 2015.
Construction output estimates are a short-term indicator of construction output by the private sector and public corporations within Great Britain and are produced from a monthly survey of 8,000 businesses in Great Britain.
Howard Archer, chief UK and European economist at IHS Global Insight, said it was a lacklustre end to a poor quarter from the construction sector.
“September’s rise of 0.3 per cent was insufficient to prevent construction output clearly contracting in the third quarter, by 1.1 per cent quarter-on-quarter,” he said.
“This was the weakest performance since the third quarter of 2012. In fact, by contracting 1.1 per cent quarter-on-quarter in the third quarter after a dip of 0.1 per cent in the second quarter, the sector is effectively in recession.”