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Stat attack: is it all doom and gloom?

“People can come up with statistics to prove anything, Kent – 40 per cent of people know that.”

It might be a little disingenuous for me to quote Homer Simpson to illustrate what is quite a complex issue, but in this case, he might be right.

Looking at the ONS figures for GDP released this morning, the immediate reaction was to seize on the negative headlines.

Shadow housing minister John Healey described the news that construction output had dipped by 2.2 per cent in Q3 2015 as “disturbing”.

Negative indicators can often be seized on quickly, but as we have seen in the past they can often be taken out of context.

The ONS’s data shows that construction output fell 2.2 per cent compared with the previous quarter. This isn’t good news – far from it.

But placing the figures in context, it could simply represent a temporary slowdown, nothing more.

Firstly, it’s likely these construction figures will be revised, much like those for last quarter.

In Q2, covering April to June, the ONS initially estimated that construction output grew 0.2 per cent compared quarter on quarter.

This was subsequently revised up to 1.4 per cent – not an insignificant change.

And in the first half of this year, the ONS added nearly £1bn of extra output to the infrastructure sector, which left some leading commentators scratching their heads.

So the statistics now being trumpeted as evidence that the sector is beginning to decline may well change in a month’s time – in fact, they might suggest something completely different.

In fairness to the ONS, other market data for July did suggest a similar trend, with the Markit/CIPS Constructon PMI showing that activity had begun to taper off after a post-election surge.

Then again, subsequent data from the PMI has suggested activity was on the up again in both August and September.

At present the monthly statistics paint a rather unclear picture, and while the quarterly view might suggest a slowdown, forecasters are still positive on the sector’s prospects overall.

Experian slightly revised its latest forecast for construction output but is still expecting output to grow 3.5 per cent by the end of the year, while the Construction Products Association is predicting an increase of 4.9 per cent.

The ONS figures could be perceived as a blip, but with skills challenges a real barrier to growth, the industry can’t afford to be complacent.

Feast from the east

Away from statistics, there’s more news of yet more Chinese involvement in UK construction, following president Xi’s visit last week.

A Salford-based contractor has formed a partnership with a Chinese developer to bid for residential development sites, and Heathrow’s director of planning and programmes has told our reporter Jack Simpson that he would “welcome” discussions with Chinese contractors.

From Construction News tomorrow

Keep an eye out for this week’s project report, online tomorrow, where we take a look at Wilmott Dixon’s redevelopment of 1 Central Square in Cardiff.

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