Infrastructure work falls sharply

New infrastructure and public housing work both fell by more than 20% in the three months to July this year when compared with the same period last year, the latest official construction output figures have shown.

The ONS construction output figures showed that over the three months to July 2012 the total volume of construction output decreased by 10% compared to the same period last year, with new work down 14.2% and repair and maintenance down by 1.2%.

Over the same period volume of new infrastructure work was down 23.9% and new public housing was down 22.4%, while new public other work (excluding infrastructure) was down 21.5%.

The figures also showed that for the month of July, total construction output was down 10.1% on July 2011.

However total output in July was up 2.2% on the previous month.

David Crosthwaite, an economist at consultant AECOM, said: “While the ONS construction output data look disappointing they are perhaps not surprising. Construction is by and large a response to investment and given that both public and private sector levels of investment have declined significantly during the recession the impact on construction is to be expected.

“New construction, in particular infrastructure, has been hit much more severely than repair and maintenance construction. Again this is largely what one would expect in tough economic times as clients are more prepared to repair and maintain existing facilities than commission new structures.

“There are calls for intervention by the government to kick-start the wider economy by increasing levels of investment in construction, a traditional response in many previous recessions, but the question remains if this government has the appetite for a policy U-turn or a Plan B.”