ONS revises construction output upwards from -0.6% to -0.2% for third quarter
The latest set of output construction figures show that ouput fell 0.2% between July and September 2011. This compares with a previous estimate of -0.6%.
Construction economist Brian Green said the revision was to be expected. “The process used by the ONS at the moment leads to quite substantial upward revisions each month.”
He said: “The current set of figures remain consistent with the industry dipping into recession in the coming months.”
The ONS also revised up Q2 output growth from 1.5% to 2.6% and Q1 output growth from -2.7% to -1.9%.
Simon Rawlinson, head of strategic research and insight at EC Harris said the result was significantly better than he expected.
“I was a bit surprised because I thought they were going to be much worse than this,” he said. “The GDP figures showed a [much larger] 0.7% decrease in the construction component in the third quarter.”
But Rawlinson added that he does expect worse figures to emerge in the coming months.
“I think the slowdown does have to happen at some point because of the new orders figures,” he said.
“Interestingly, [this morning’s] results showed that new work in housing fell in the third quarter by about 4%, which seems to contradict what housebuilders are reporting.”
Andrew Duncan, managing director of property at Turner & Townsend, talked of a “tidal wave of uncertainty washing across the Channel” due to the Eurozone crisis.
“Over the summer months sentiment in the sector did improve - or rather became less funereal,” he said.”But these third quarter figures will dash any hopes that the worst is over.
“The one, meagre, ray of light is the steady increase in levels of repair and maintenance work. But that cannot offset the dropping off of new build work.
“The omens for next year are not good, as the Eurozone saga shows little sign of abating, and the doubt it is sowing risks undermining the fragile progress made by the industry in 2011.”
Read the Brickonomics blog for anlysis on the revised output figures.