There is no getting away from the fact that the construction output data continue to look increasingly scary. If we compare month on month the 12-month total output for construction we see the industry over the past three or four months shrinking by about £1 billion a month, or put another way about 1%. The graph shows the direction of the annualised output.
There was a very upbeat headline given by the RICS press office to the latest housing market survey released today by the surveyors’ body. Judging by various headlines from news outlets, including that on the BBC website, and various tweets I noticed on the subject, the message received by the casual observer appears to be “well that’s all good then”. I was bemused. I can see that less bad may be construed as good in a world of torture. But looking…
It would be easy to attack the Office for National Statistics for miscalculating the new orders figures by £1.2 billion for the second quarter of this year. Yes it’s embarrassing for the organisation. The folk there don’t need me or anyone else to tell them that. By all accounts there was a glitch in the system which chucked out a rare error.
The worrying downward trend in construction activity comes out strongly in the latest set of Bank of England estimates for the economic activity. Construction ranks the lowest by some margin of the range scores provided by the Bank of England’s agents for August.
The construction industry is about 10% smaller than it was a year ago on a quarter-to-quarter comparison and it has been shrinking at almost £1 billion a month recently. That’s pretty scary stuff. It should be scaring the pants off the policy makers.
For many of those who have seen construction in and out of recessions in the past there will be a familiar pattern emerging. The industry is losing skills that will be desperately needed when the industry rebounds.
The latest new orders figures from ONS once digested will inevitably leave the construction industry feeling hungry and wondering where its next meal is coming from. Some will note the quarter-on-quarter rise of 0.2% and the 11.1% rise in the second quarter compared with the same time last year and foolishly suggest this represents improvement. They would be wrong. If you ignore the public sector data (which bounced up slightly in the quarter), the direction of orders was distinctly down quarter…
The latest employment figures for construction don’t tell us a huge amount about job prospects in the industry other than things seem to be getting worse. But we knew that. Overall employment in the second quarter of this year was 1.1% down on a year ago and is about 15% down on the same quarter five years ago, just before the credit crunch.
Today’s estimated second quarter fall in construction output of 5.2% presented in the GDP data has caused quite a ripple of shock. Should it?
The latest construction output figures suggest the decline is the industry is gathering pace.