Construction output fell 2.6% in the third quarter of this year. This fall was slightly more than had been expected when the nation’s first estimate of gross domestic product was released. For informed industry watchers this was no surprise. The fact that revisions by the Office for National Statistics to earlier data pushed the recorded level of output down still further was also not a surprise.
The recession in construction will be longer and deeper than we thought three months ago. That is the message in the latest set of industry forecasts emerging this month. This may evoke a sense of déjà vu. Each quarter of late the forecasts have darkened. The latest set look pretty bleak as we can see from the graph.
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.
There will be some people expelling phews of relief at seeing construction output for the second quarter revised up by the Office for National Statistics from a dramatic drop of 5.2% to a less frightful fall of 3.9%. Certainly this will have the effect, all other things being equal, of lifting the rather shocking GDP drop of 0.7% by 0.1% or so. Not much, but a little.
The latest output figures released by the Office for National Statistics on Friday appear to support growing concerns that the decline in construction workload might be accelerating. Analysis of the data suggests that as the decline in public sector work is gathering pace the recovery in the private sector is petering out.
The latest official data for new orders in construction could be read as good news. They show an up-tick of almost 5% in the first quarter of this year on the seasonally adjusted measure. That sounds promising on the face of it and many might claim that it is. But that would be to look at a small detail in a much bigger picture that looks far from promising.
The latest national jobs figures may well provide some comfort for those in construction as they show that the level of employment held up last year. The number of jobs stood at 2,052,000 on the workforce jobs by industry count. And employment on the Labour Force Survey count stood at 2,165,000. Given the margins of error in the surveys the broad picture, as we see from graph 1, is of a flat jobs market in construction for the best part of…
This is no ordinary recession. This is a serious depression, the end of which still looks to be at least a couple of years away and possibly a lot further. If that proves the case it would have lasted longer than the Great Depression of the 1930s, although the recession would not have been as quite as deep. The well respected economist and Financial Times commentator Martin Wolf recently wrote: “The UK is in the midst of what is set…
The construction firms may be suffering and may be shedding jobs, but the bald statistics so far for this year suggest that the industry is faring better than the gloomy news might have some believe. The latest construction output figures show that in pure cash terms the industry pocketed about £1.24 billion more in the first five months of this year than in the same period in 2010. And 2010 proved a pretty good year in the end, with output…
The latest forecast from Leading Edge may provide some comfort to those who are fretful about the prospects of ever deeper declines in the construction industry as public funds rapidly shrink. Yes, the forecast sees a drop in output next year – 0.9% after 3.2% growth this year. But the Leading Edge team are optimistic that growth in the private sector will accelerate to buoy construction overall and more than compensate for the loss work funded by the public purse….