Latest figures indicate capital spending cuts are beginning to impact the market

Public sector construction output is now in recession after it dropped for the second quarter in a row, as the latest figures indicate that capital spending cuts are finally beginning to have an impact on the market.  

ONS figures for the first quarter of 2011 show that public work, excluding infrastructure, dropped 7.4% following a drop of 3.3% in Q4 of last year, ending steady growth since the beginning of 2008.

Output in the public sector was £3,154m during the quarter, down from £3,407m.

Public work, excluding infrastructure, dropped 7.4%

Since 2008 the government has pumped money into the construction sector.

This stimulus has helped the proportion of work coming from the public sector to double from just over 10% in the first three months of 2008 to 20% in the latest quarter.

Public housing output is now also in recession, having declined for two consecutive quarters after a largely uninterrupted rise since the start of 2008.

Output fell from £1,148m in the Q3 of 2010 to £1,075m in the latest figures.

Overall, the figures showed a 4% drop in output since the last quarter.