Construction output in biggest fall for nearly six years

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Construction output has seen its biggest fall in nearly six years, as official figures registered a 3.4% drop in the three months to April 2018, as compared to the three months prior.

The three-month on three-month decline was a result of falls in both repair and maintenance and new work, which fell 3% and 3.7% respectively, the Office for National Statistics said. It is the largest fall since August 2012.

Output in April had a slightly bounce-back of 0.5% as compared to March, the figures showed. However, it was still 3.3% lower compared to April 2017.

And total construction new orders also fell in the first quarter (January to March), dropping 4.6% quarter on quarter, and 6.6% in annual terms.

Rebecca Larkin, senior economist at the Construction Products Association (CPA), said: “The 0.5% rise in April reflects an element of catch-up after the combination of Carillion’s liquidation and the bad weather in February and March.

"This seems like a false positive, however, as output remained weak compared to April last year, with the 3.3% fall equivalent to a £430m reduction in construction work. Only the private housing and industrial sectors recorded growth, the former driven by the traditional spring selling season and the latter due to shorter lead times in factories and warehouses construction."

"The new orders data confirmed an underlying weakness at the start of the year unlikely to be due to the weather. Private housing, industrial and public non-housing new orders increased during Q1, but large falls in the infrastructure and commercial sectors, which account for almost one-third of total construction, are set to act as a drag on growth."