ONS data published recently shows that construction output contracted 1.3% in the second quarter of 2019, reversing the 1.4% growth recorded in Q1 and contributing to a fall in UK GDP, along with the manufacturing sector. On a quarterly basis, output fell in all sectors except commercial, public housing and public housing repair, maintenance and improvement. On an annual basis, Q2 output was 1.4% higher, led by housing and infrastructure.
Rebecca Larkin, Senior Economist at the Construction Products Association, commented: “The sharpest decline in construction activity was the 0.7% monthly fall in June, as a result of unseasonably bad weather delaying work on-site, particularly in the RM&I sectors, which account for around one-third of overall output.
“However, even though construction lost £521 million in output compared to Q1, the volume of activity was still higher than a year ago. This was driven by clear pockets of activity in house building by housing associations and local authorities, with public housing output reaching a record high level in Q2, and although output fell in quarterly terms for private housing and infrastructure, output from these sectors remains at a historically high level.
“The performance of other sectors such as commercial offices and retail, industrial factories is less convincing against the backdrop of Brexit uncertainty that complicates decision-making on investments with a high up-front outlay.”