ONS sees construction output falls prior to General Election

The latest construction output from the Office of National Statistics (ONS) indicates that overall activity in the industry fell 0.8% in April compared to March.  New construction work rose 1.6% and basic repairs and maintenance work decreased 4.8%.

Dr Noble Francis, Economics Director, said:  “Total construction output fell slightly in April but this was expected due to the uncertainty prior to the General Election and its adverse impacts on consumer and business confidence.  Specifically, this influenced the kinds of construction work that can be temporarily delayed such as repairs, maintenance and improvements work, which fell 4.8% in April.  New construction work was affected to a lesser extent and, despite election uncertainty, private housing output was 4.5% higher than in March and 16.6% higher than one year earlier.

“Overall, construction output was still 1.5% higher than one year earlier and, looking forward, the ONS new orders for construction point to further growth in activity over the next 12-18 months.”

Chris Temple, engineering and construction leader at PwC, said: “Despite these latest figures, we continue to expect the sector to show solid, healthy growth during 2015. In the run-up to the general election we saw a temporary slowdown in new orders. However, we don’t expect that this will be significant enough to counteract the upward trend of growth for the year, and there is still strong confidence in the sector for 2015 and beyond.

“There is a lack of large infrastructure projects at the moment, accounting for the lull in that part of the sector. Furthermore, uncertainty about the economy in Europe has knock-on effects for business confidence and the short-term order books of construction firms. But political certainty in the UK after the general election and further details on the government’s plans for most subsectors including infrastructure should give the sector more confidence.

“Construction firms will look to the government to give further clarity on its plans in the forthcoming Summer Budget. We’re confident that this temporary slowdown won’t become a longer-term trend, and our clients are optimistic for their growth prospects in the rest of 2015. Overall the picture for the construction sector remains healthy.”