Three Quarters of Decline in the Construction Industry


The Office for National Statistics (ONS) has released data showing that the construction industry in the UK has had three consecutive quarters of negative growth. Despite construction output falling in the second, third, and fourth quarters of 2017, there was sufficient growth in the first quarter to make 2017 a year of growth.

Construction output fell by 0.7% or £283 million in the fourth quarter of 2017, while the value of private commercial work, compared to Q3, fell by £324 million. However, private housing increased by £403 million, reaching its highest level on record.

Despite three quarterly declines, the construction output in the UK still managed to grow by 5.1% in 2017 as a while due to the strong end of 2016 and the first quarter of 2017. March 2017 saw the pick output, reaching a level that was 31% higher than the lowest point of the last five years registered in January 2013.

Rebecca Larkin, senior economist at the Construction Products Association, offers more insight into this matter, saying that the “overall growth in construction activity slowed significantly over the course of 2017, with output falling since Q2 and rising only 0.9% in annual terms in Q4. The quarter saw continued growth in private housing driven by five years of the Help to Buy equity loan, and early work on major projects such as the Thames Tideway Tunnel driving a 0.7% rise in infrastructure. However, even with the government’s £7.4bn equity loan outlay so far and a further £10bn set aside, house-building activity could not offset the broad downturn in R&M, commercial and industrial.”

“Underscoring the supportive effects of the government’s Help to Buy policy, private housing output is now 28.8% higher than its pre-recession peak. By contrast, commercial output is 26.4% below its historic high, whilst industrial output is 28.5% lower,” she added.

The new figures for January will hopefully look better than the ones in 2017, although that is slightly unlikely after what happened with the Carillion.


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