Construction output – a weak start to 2018

Office for National Statistics (ONS) figures published on March 9 show that construction output fell by 3.4% in January – its worst monthly performance since June 2012.

On a less volatile three-month basis, output declined 1.0%, led by falls in commercial, industrial, public non-housing and repair and maintenance. Data also showed that new orders in 2017 Q4 fell 25.0% over the quarter and were 1.3% lower on an annual basis.

Rebecca Larkin, senior economist at the Construction Products Association, said: “After three quarters of decline last year, it appears that 2018 is unlikely to herald a resurgence in industry growth. The fall in activity in January is likely to have been worsened by any pause on projects, due to the liquidation of Carillion in the middle of the month. The snow disruption in February and March adds to the downside forces on construction during the opening quarter of the new year.”

Rebecca continued: “The news from the new orders data in 2017 Q4 did little to improve the mood. Although the headline 25.0% quarterly fall was reflective of the spike caused by the award of HS2 contracts in the previous quarter, outside of infrastructure, new orders declined in all sectors, including a 2.3% fall in private housing, which has previously been a strong driver of construction growth.”

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