ONS figures show rise in construction output for March

3.9% increase largely due to repair and maintenance work.

The Office for National Statistics (ONS) released its latest construction output figures for the industry today which show a marked increase in March 2015. 

Output grew by 3.9% in March, a significant turnaround from February 2015 when a 0.3% contraction was recorded. 

This increase is favourable when compared to March 2014 as well, with a 1.6% increase between the two. This was due to repair and maintenance, and a slight growth in new work. 

New work increase was mainly because of private housing which increased by 11.1%.

The increase in March 2015 compared to February 2015 was driven by repair and maintenance, which increased by 12.2%. This large growth was mainly due to non-housing components that increased by 20.1%. Meanwhile, housing components rose by 4.1%. 

Encouragingly, new work was also on the rise in March (2.3%) after five consecutive months of contraction. 

ONS, with all these figures, defines output as the amount charged by construction companies to customers for value of work that is produced during the period, excluding both VAT and payments to subcontractors. 

However, the figures of construction output for the first quarter of 2015 are less favourable. From January to March, output is down by 1.1% in all work when compared to the final quarter of 2014. 

This has been attributed to decreases in new work during that time, along with repair and maintenance, which were down by 1.7% and 0.2%. 

The fall in new work was the largest since Q1 2013, which was 2%. 

When compared to the first quarter of 2014, the output was estimated to have decreased by 0.3% – the first year-on-year fall since the second quarter of 2013. 

With a fall in Q1 of 2015 following a decrease in the final quarter of 2014, this technically means the industry has entered recession. 

However, the Construction Products Association (CPA) commented that this is at odds with other industry data and the recent evidence that has suggested growth within the construction industry. 

This encouragement from other sources – including CPA’s Construction Trade Survey – was reinforced through the Bank of England, which released its latest Inflation Report that highlighted concerns with comparative figures. 

Both ONS and the CPA are working to address this. 

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