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Construction output continues to slide

Output in the construction industry fell by more than 2 per cent in January 2012 compared to January 2011, according to the latest figures from the Office for National Statistics.

The latest ONS figures state that output for the beginning of this year was worth £7.25 billion, 12.3 per cent lower than December 2011 and 2.3 per cent below the £7.43bn in January last year.

Public sector output fell by 18 per cent, while public housing dipped by 11 per cent. Over the year rises in output occurred in private housing (5 per cent) and commercial (5 per cent).

But compared to December 2011, there were double digit falls in most sectors, with none recording a rise.

Revisions to the quarterly data mean that output for Q4 2011 fell by 0.2 per cent, slightly less than the 0.5 per cent previously stated.

Noble Francis, economics director at the Construction Products Association said: “Overall, we are not particularly surprised that construction output has continued to decline, due to the effect of the public sector cuts.  However, what is extremely disconcerting is that while public sector construction activity has fallen 12 per cent in the three months to January compared to the previous three months, private sector construction has fared almost as badly, falling 10 per cent over the same period.

‘The government has made much play on private sector construction leading the recovery, as the public sector cuts begin to bite.  Unfortunately from the ONS data out today, this recovery is just not happening and even commercial activity, usually the largest private construction sector is showing a fall of 11 percent.

‘With this evidence, it is imperative that the Chancellor uses his budget speech later this month to provide an urgent boost to kick start construction activity, so as to get the economic recovery back on track.”

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