Drop in construction activity driven by falling levels of public sector work

Construction output fell by 10.2% in the three months to January 2013 compared to the same period a year earlier, according to the Office for National Statistics.

New construction work in the period fell by 12.7%, largely driven by a reduction in public sector ‘other new work’ by almost 25% compared to the year before.

Private commercial work also accounted for a large proportion of the drop-off, with a fall of 14.5% in ‘other new work’ recorded year on year.

Other new work excludes housing and infrastructure but includes the industrial, education and office sectors.

The volume of public sector housing work fell by 20.4% year-on-year in January, to its lowest level since the monthly survey began in January 2010.

A statement from the ONS said: “Even though construction estimates account for just 6.8% of GDP, it has provided some of the main downward contributions to total output since the recession.

“More positively, business confidence in the industry was upbeat this month, though it remains to be seen whether a sustained recovery can be made.”