Latest data from the Office for National Statistics reveals that, in constant (2005) prices, non-seasonally adjusted, the total volume of construction output in November 2012 was estimated to have been 9.8% lower than in November 2011.
This equates to more than £8bn of lost work for the industry over the course of the year.
Comparing the three months from September to November 2012 with the same three months of 2011 shows that the volume of construction output decreased by 9.1%. New work decreased by 11.2% and repair and maintenance by 5.0%
The largest contributor to the decline in output was the private commercial sector which fell by 16.2%. This sector is the largest, contributing approximately 22% to total output
The volume of infrastructure work decreased by 2.4%, although this sector has shown recent signs of recovery, growing by 12.1% in the latest three months compared with the previous three months
Over the three-month period, new public non-housing decreased by 17.2% year-on-year and public housing decreased by 19.5%, the largest decline of any sector.
The only sectors to show growth over the three month period, year-on-year, were public housing repair and maintenance, up 6.6%, and private industrial, up 0.2%, although the latter sector is small, contributing only 3% to total output.
The Civil Engineering Contractors Association (CECA) said that the slowdown in the infrastructure sector was worrying news for the wider economy. Director of external affairs Alasdair Reisner said: “The government has rightly focused its recovery strategy on securing growth in the infrastructure sector. It is concerning that the general trend over the last year has been one of negative, rather than positive growth.
“CECA hopes that recent efforts to stimulate immediate activity will bear fruit, both for the sake of our members and for UK plc. At the same time, these figures show that there is no room for complacency if the infrastructure sector is to act as a motor to kick-start growth in the economy.”
Scottish Building Federation executive director Michael Levack said: “With 11 months of data now compiled for the construction industry last year, output has fallen by more than 8% compared to 2011, wiping more than £8bn off its value to the UK economy. We’ll need to wait until early March to see how the Scottish industry has performed in the last quarter of 2012 but I fully anticipate that those figures will also show steep falls in output for the full calendar year.
“What’s more, our own membership survey published in December and the recent survey from the Royal Institute of Chartered Surveyors both confirm that the future outlook for the industry remains extremely challenging.
“In this context, there can be no greater priority for ministers than to use all instruments at their disposal to get shovels in the ground quickly on publicly funded projects and to introduce additional tax measures to stimulate private sector demand, in particular by slashing VAT on building repair and maintenance works.”
David Crosthwaite, an economist for construction and property consultant Aecom, commented: “Again public sector construction fared badly with some significant declines, particularly in the public housing sector. However, perhaps more concerning was that the largest sector by volume of activity, private commercial construction, fell by almost 16% compared to the same period last year.”
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