Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

GDP growth slows to 0.3% as construction output dips

A slowdown in construction output has contributed to a dip in GDP during the first three months of the year.

GDP growth slowed to 0.3 per cent in Q1 2015, after growing by 0.6 per cent in the previous quarter, according to data from the Office for National Statistics.

This meant GDP was 4 per cent higher in Q1 2015 than the pre-downturn peak of Q1 2008.

Construction accounts for 6.4 per cent of GDP, according to the statistics, but the sector’s output declined by 1.6 per cent quarter on quarter in Q1, following a 2.2 per cent dip in the previous quarter.

Compared with the same period a year earlier, construction output fell 0.8 per cent.

Elsewhere, output increased by 0.5 per cent in the service sector, but the other two main industrial groupings within the economy contracted, with production dipping 0.1 per cent and agriculture falling 0.2 per cent.

Commenting on the data, EC Harris head of strategic research Simon Rawlinson said: “Construction’s weak data has contributed to a halving of the growth rate, offsetting growth in services and other aspects of the consumer economy.” 

Mr Rawlinson higlighted three factors that may have affected the statistics.

“Firstly, construction work is highly seasonal and some of the dip measured by the ONS may be explained by a stronger than usual cyclical fall,” he said.

“Secondly, much of the drop appears to be affecting repair and maintenance work, which grew strongly in 2014 – and which is easier to switch on and off than new-build work. 

“Thirdly, the rapid growth seen in construction during 2014 may be tailing off a little – which is just as well, as it was unsustainable in some markets.”

He added that the industry was “actually in much better health” than the ONS statistics suggest.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.