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Flooding hits February output, but industry continues to show growth

Construction output grew once more in February 2014 compared to the same month last year, despite a 2.8 per cent drop in output compared to January.

The ONS construction output data showed 2.8 per cent growth in February compared to a year before. Both new work and repair and maintenance output were up, by 3.1 per cent and 2.3 per cent respectively, on 2013.

The industry has now shown nine months of consecutive year on year growth. Housing was once again the primary driver, with public housing up by 31.7 per cent and private housing rising by 15.4 per cent.

Infrastructure output in February 2014 was down 6.8 per cent, while other public sector work was down 3.1 per cent.

The industry’s largest sector, commercial, was broadly flat, with a growth of just 0.4 per cent.

A monthly comparison of the figures showed a fall in February compared to January, of 2.8 per cent. New work was down by 2.6 per cent over the month, while repair and maintenance output fell by 3.1 per cent.

Over the month, the only sectors to record growth were public housing (2.7 per cent) and industrial (6.9 per cent). The sharpest fall in new work output was in private housing, of 6.3 per cent.

EC Harris head of strategic research and insight Simon Rawlinson said: “Friday’s disappointing construction output data, showing a fall of 2.8 per cent in the month is likely to be a short term blip but acts as an useful reality check. Longer term measures all indicate continuing positive growth.

“Poor weather in January and February is likely to have been a significant contributor to the fall and output is likely to rebound in March – particularly in house building ahead of the spring sales season.   

“One watch out is infrastructure, where output was lower than a year ago – possibly indicating that efforts to smooth workload during the transition between control periods in the water, gas and electricity industries may not have been as successful as intended.”

Steve McGuckin, UK managing director of Turner + Townsend said: “Widespread flooding held up construction work in several parts of England in February - but a fall in output during one rainsodden month will not dampen the industry’s enthusiasm.

“The South-east’s housing boom is finally rippling out to other regions, and in London the demand for new residential property is now at extraordinary levels. Residential schemes regularly sell out off-plan in days - with overseas investors accounting for the lion’s share of sales.

“Construction has always been a barometer of economic sentiment, but at its best it can also drive truly broad-based economic growth. So the continued fall in infrastructure work is a concern.”

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