The Office for National Statistics is investigating why its statistics are so at variance with the results of industry surveys.

In particular, the monthly survey of construction industry purchasing managers conducted by economists at Markit for the Chartered Institute of Procurement & Supply (CIPS) indicates that the UK construction industry has now grown every month for the past 35 months.

But according to the government’s own Office for National Statistics (ONS) data, also based on sample surveys, construction output has been much more up and down, falling in May 2015, November 2015, January 2016 and February 2016. In fact, in May 2015 the industry was officially in recession, according to ONS economists.

The ONS has now produced a report* comparing its own data with the purchasing managers’ index (PMI) produced by Markit/CIPS.  ONS says that “the Markit’s PMI is the more timely estimate, but our slower release of data enables us to provide a more comprehensive coverage of the industry”.

It adds: “There are clear conceptual differences between the underlying methodologies of the two measures that make a direct comparison very difficult but, post 2013, both show an underlying upwards trend for output in the construction industry.”

ONS said that it would now explore the differences further to determine why the ONS headline and Markit PMI month-on-month measures have diverged so much since 2013. In particular, it is going to explore the relative weighting given to the responses of different sized firms in each survey.

It is also going to “take a wider look” at other sentiment surveys on the construction industry, such as the state of trade survey published by the Federation of Master Builders (FMB).

* Output in the Construction Industry: A comparison of construction output and Market CIPS data […click to view]

ONS Monthly Business Survey month on month diffusion index compared with Markit construction PMI, 2010 to 2015

Great Britain (MBS), UK (PMI)

Source: Office for National Statistics

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