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Construction to see further falls according to ONS figures

The construction industry has fewer new orders on its books than at the end of last year according to figures published by the Office of National Statistics.

ONS shows a 23% fall in the first quarter of 2011compared to the final quarter of 2010, but the overall trend for the last 12 months also shows a 7% fall.

That figure falls in with the latest forecasts from the Construction Products Association.

CPA economics director Noble Francis said: ‘The fall in orders for this quarter follows a 26% increase from the previous quarter at the end of 2010. These two figures show that quarter on quarter the situation is very volatile. To achieve a more accurate picture of the longer trend it is better to look at the orders over the last 12 months and compare these with the previous 12 months. Over this period orders were 7% down with significant falls in the public housing, education and health and infrastructure sectors, only partially offset by rises in private housing, commercial offices and retail sectors.

Compared with the previous 12 months, new public housing orders were 8% lower, education and health orders were 18% lower and infrastructure orders were 32% lower.

However, private housing orders during the last 12 months were 45% higher than during the previous 12 months. Commercial offices, retail and leisure orders were 6% higher over the same period.

“The sharp nature of the public sector spending cuts appear as though they will outweigh private sector recovery in the short term and, as a consequence, we forecast that construction output will fall in 2011 and 2012, by 1% and 2% respectively, before private sector recovery starts to drive growth in the construction industry as a whole,” Francis said.

The ONS has been criticised by some in the industry, Travis Perkins’ CEO Geoff Cooper among them, for being out of kilter with what the industry is actually experiencing.

About Fiona Russell-Horne

Fiona Russell-Horne
Group Managing Editor across the BMJ portfolio.

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