The worrying collapse in British conststruction


by Richard Exell    
12:28 pm - October 14th 2011

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Today’s construction industry output data provides more evidence that the recovery has been draining away for a while now.

Output in August was down 0.4% from July and 4.1% from August 2010. If you look at the more consistent figures for three month periods, the decline in total output in June – August 2011 from the same period in 2010 is lower, at 1.9%.

But a breakdown into different categories is quite revealing:

What I find particularly worrying is that fall of nearly a quarter in new private industrial construction.

That’s partly because the 2010 figure was highish, as everyone thought we were warming up the recovery and partly because the 2011 figure reflects the fears that we are tumbling into another recession.

That 1.9% fall in total construction output comes after 5 months in which the increase was less than it had been in the previous month:

(I’ve compared the three months ending with the month on the Y-axis with the same period in 2010.)

These figures reinforce the message of the Purchasing Managers’ Index for construction earlier this month, which was

Growth of UK construction activity slows to near-stagnation

Markit reported that new work had collapsed and activity was being kept going mainly by existing orders.

Construction is yet another industry that is bound to contract if demand continues at this low level.

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About the author
Richard is an regular contributor. He is the TUC’s Senior Policy Officer covering social security, tax credits and labour market issues.
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Reader comments


1. Chaise Guevara

What about the worrying collapse in British proofrfreading?

I’ll get me coat.

2. Bugger (the Panda)

Not is Scotland it hasn’t.

I wonder why.

Maybe the clue is in the fact that the SNP Gov advanced the programme of infrastructure development. Employment has actually not gone down and this is now the 9th consecutive month of economic growth in Scotland without which the UK’s figure would have been even sicker.

It is not rocket science

3. Watchman

Richard,

Your concerns about the lack of private industrial construction is likely misplaced – as a recession tends to create a surplus of industrial accomodation (and as existing projects at the start of the recession will continue to finish if possible) there is a clear lag in this as a measure of the economy.

It is perhaps more relevant (if you go to the source table – for some reason you conflate this figure with public non-housing and infrastructure) that private non-housing repair and maintainance is up – suggesting where businesses are focussing their current attention. Infrastructure (which is not divided into public and private, but will contain both) is up in terms of building and maintainance, suggesting again that investment is there. Private housing (much less of a lag to the economy as an indicator) is also up slightly, although maintainance in this field is down (but this may reflect a lack of extensions etc – these are not new builds).

State spending is obviously down, but otherwise the picture is more interesting, with the headline figure you select not being as worrying as that (and some better figures being obscured by your presentation).

4. Leon Wolfson

@2 – Yea, gee, it’s almost like that’s a good idea or something. And I mean, it’s not like there’s something like oh…er…. council house construction on brownfield sites which would solve a LOT of issues as well as providing work…

@3 – Don’t worry, we’re only heading straight into a depression. Right.

5. dh

The worrying collapse in British spelling


Reactions: Twitter, blogs
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  2. Dorian Lynskey

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  3. Alex Braithwaite

    The worrying collapse in British conststruction | Liberal Conspiracy http://t.co/gKMJU4ww via @libcon





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