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Construction output falls again, ONS reveals

The volume of construction output fell by 1.1 per cent in the three months to October, according to the Office for National Statistics.

That fall represents a £295 million drop in output for the industry. New work fell by 1.8 per cent – or £340m - but repair and maintenance rose by 0.5 per cent, or £44m.

Private industrial new work showed the biggest percentage fall, down 13.5 per cent, representing £130m.

The biggest increase - 11.5 per cent, or £349m - was new infrastructure work.

The largest volume decrease was in public non housing new work, which fell by 12.6 per cent, or £456m.

October also saw a 2.5 per cent drop on September and 2.7 per cent on October 2010.

Simon Rawlinson, head of strategic research at EC Harris, said: “Two thirds of the reduction in volume has taken place in new build. Private housing and the commercial sector – expected to be the engines of recovery appear to be losing momentum, whilst activity in public non-housing, which has held up remarkably during 2011, is at its lowest level since weather-affected January.  

“It is early days, but fourth quarter 2011 could prove to be the point at which public sector construction ceased to defy gravity.

“On a positive note, with output data available from 10 months of returns, it looks as if total construction volumes for 2011 could be at least 2 per cent higher than 2010 – a remarkable achievement given how sentiment has been affected during the latter half of the year. 

“Unfortunately, no forecasters currently expect this performance to be repeated in 2012.”

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