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UK construction output in Sept decline

ONS data reveals big drop in commercial construction

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UK construction activity dipped by 13.1 percent in September on an annualised basis, the Office for National Statistics said on Friday.

As the downturn continued, September saw yet more drops in new building works by the commercial and public sectors. Both commercial building works and public sector works, excluding infrastructure, fell by a fifth from a year ago.

An ONS spokesperson said that while house building activity saw a 5 percent bounce in month-over-month terms; it still remained 12 percent below the activity recorded over the corresponding period last year.

Last week, Markit and CIPS noted that both residential and commercial construction activity continued to decline in October for the fifth month in a row. They also added that employers in the construction sector cut jobs at the fastest rate since August 2011.

Howard Archer, chief UK economist at IHS Global Insight, said the latest evidence on construction does little to suggest that the sector’s fortunes are starting to improve markedly.

“On top of ONS data, the October (construction) purchasing managers’ survey indicated that it is very possible that the sector could be headed for yet further contraction in the fourth quarter...Business expectations in the sector remain very low compared to past norms,” he told CFOWorld.

Even if the construction sector can avoid further contraction in the fourth quarter, it certainly looks unrealistic to expect it to materially contribute to growth, Archer added.


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