Construction output fell by 2.2% in October versus September, UK

Construction output in the UK declined by 2.2% in October compared to September, the Office for National Statistics (ONS) informed on Friday.

Analysts were surprised at the steep fall, after the sector had posted several months of growth, which had help push up economic growth in Q3 2014.

Economists monitor construction activity closely. This latest slowdown could dent previously strong levels of GDP growth.

New Construction work and Repair & Maintenance both fell in October, by 1.7% and 3.1% respectively.

Only the ‘public sector other new work’ saw an increase in the New Work category, while Repair & Maintenance posted falls across all its components.

The second estimate for GDP growth for the third quarter, published on November 26th, included a construction estimate which showed 0.8% growth. This has been revised to 1.6% growth, which added 0.1 of a percentage point to the GDP figure.

UK Construction activity Oct 2014

Source: “Output in the Construction Industry – October 2014” – Office for National Statistics

October saw the 17th successive month of year-on-year growth, increasing by 0.7%. However, the ONS added that it was the slowest year-on-year growth since May 2013.

In the third quarter, new orders for the construction industry grew by 5.2% compared to the second quarter, and by 3.2% versus the third quarter last year.

Private commercial posted 22.4% growth, private new housing 12.9%, and infrastructure 8.1%.

UK builder Bellway reported on Friday that the housing market, after a period of strong growth, is “returning to normal”.

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