Recent government figures have revealed the first annual decline in construction industry output for more than two years.

Data from the Office of National Statistics (ONS) shows in July 2015, output in the construction industry decreased by 1% after increasing by 0.9% in June.

All new work decreased by 1.5% while all repair and maintenance showed no growth.

Within all new work, there were falls in all work types except infrastructure and private industrial.

Public new housing, private new housing, public other new work and private commercial work decreased by 5.8%, 2%, 4.5% and 2.9%.

Within the repair and maintenance (R&M) category, the growth in non-housing R&M of 1.4% was offset by housing R&M which decreased by 1.4%.

Compared with July 2014, output in the construction industry decreased by 0.7%.


This is the first year-on-year fall in construction output since May 2013, when it fell by 2.8%.

New orders for the construction industry in the second quarter (Apr to June) were estimated to have decreased by 0.4% compared with Quarter 1 (Jan to Mar) and increased by 1.9% compared with the second quarter of 2014.

There were decreases in private commercial (-12%), public other new work (-10.7%) and private new housing (-3.3%) in Quarter 2.

Rebecca Larkin, Economist at the Construction Products Association (CPA), said while it was disappointing to see a decline, it is believed the industry is on course for growth over the coming years.

"The declines appear to be led by a weak public housing sector, which is no surprise given the government's focus on austerity and the resulting decrease in starts," she said.

"In addition, growth in the private housing sector was slightly less than we would have expected, though it remains a strong sector overall.  Finally, the commercial sector was down 3.2% year-on-year, which may be a result of rising costs leading to project delays.

"On the positive side, output for both the infrastructure and industrial sectors was notably robust, up 17.3% and 4.9% on the previous year, respectively.  These same sectors are also leading the rise in orders."

Ms Larkin added: "Our own surveys along with many from across the industry, however, support our view that the outlook for the industry is positive. We forecast growth of 4.9% in 2015 and 4.2% in 2016, and 21.7% growth between 2015 and 2019."

(LM)