ONS: construction of new homes at record high

Construction output fell slightly in February but the industry was boosted by a record increase in housebuilding according to the latest figures from the Office of National Statistics.

Output in the construction industry fell by 0.3% in February in comparison with the previous month, marking the second month in a row that output has fallen. This was the first time the construction industry had shrunk two months in a row since June 2015.

However, when compared to February last year, output in the construction industry has increased by 0.3%.

Drop in output was seen in all new work (0.2%) and repair and maintenance (0.5%). A steep drop of 9.7% was seen in the small private industrial sub-sector, which includes such projects as the building of new factories.

Within the new work sector, decreases were reported in all work types with the exception of private new housing.

Total housebuilding saw a month on month increase of 2.9% in February and growth of 6.7% in the three months to February in comparison to the previous three months, its fastest growth rate in almost two years.

The figures from the Office of National Statistics follow the Chartered Institute of Purchasing & Supply (CIPS) UK Construction Purchasing Managers’ Index (PMI) that also suggest the construction industry has had a soft start to the year and appears to be affected by the uncertainty surrounding Britain’s future in the European Union, with the referendum to come in June.

Howard Archer, Chief Economist at IHS Global Insight, said: “The construction sector is seemingly currently being affected by increased caution among clients, especially for major projects, amid heightened UK economic uncertainties that are being magnified as June’s referendum looms”.

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