ONS error overstates construction growth five-fold

An arithmetical error caused the Office of National Statistics to overstate construction output growth nearly five-fold, the body has admitted.

The ONS has now sharply revised down construction output figures just seven hours after they were initially published.

Output in the second quarter grew by just 0.5% in the second quarter of the year, rather than the 2.3% stated this morning. This morning the ONS said the 2.3% growth – unexpected by most construction economists – meant the government would be able to revise upwards the overall GDP for the second quarter by 0.1 percentage point.

The change also means that, rather than registering year-on-year growth of 0.8%, output is now 1.6% down from a year ago. The difference in the revision is worth £471m less construction activity in the second three months of the year.

The change is particularly embarrassing for the statistics body, which has been repeatedly accused of failing to properly record industry output since its methodology for producing construction output figures was revised at the start of 2010.

The ONS said in a statement: “There was an arithmetical error in the final stages of preparation of the Output in Construction estimates published at 9.30 a.m. today (12 August 2011).

“The impact of the correction on the headline quarterly growth is to reduce the figure from the originally published 2.3 per cent to 0.5 per cent.

“ONS apologises for any inconvenience caused.”

In the revised figures, the amount of new work rose sharply in both the public and private sector, an increase of 2.4% overall, based on increases in infrastructure and private commercial activity. However, repair and maintenance work fell in both housing and non-housing sectors, down 3.2% overall.

The revised statement can be found here. The original release has been taken down.