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Output in the Construction Industry, August 2015

In August 2015, output in the construction industry was estimated to have decreased by 4.3% compared with July 2015 and decreased by 1.3% compared with August 2014. This was the first year-on-year fall since May 2013.

All new work decreased in August 2015 compared with July 2015 by 3.6%, repair and maintenance (R&M) decreased by 5.6% over the same period. All work types reported decreases.

The UK’s trade deficit  narrowed slightly, but this is after July’s dire figures

Comparing the 3 months, June 2015 to August 2015, with the previous 3 months, March 2015 to May 2015, construction output fell by 0.8%. Repair and maintenance decreased by 3.6% while all new work increased by 0.7%.
Slump: The construction sector saw its biggest monthly fall in output in nearly two years

When comparing the 3 months, June 2015 to August 2015 with the same 3 months a year ago, construction output was estimated to have increased by 1.8%. All new work increased by 5.6% while repair and maintenance decreased by 4.6%.

Housebuilding: Construction of new housing fell by 3 per cent, putting more pressure on the Government to do something about the shortage of homes that is affecting the UK

The Quarterly National Accounts (QNA) published on 30 September 2015 included an estimate of construction output for Quarter 2 (Apr to June) 2015 of 1.4%, this was an upwards revision to the estimate included in the second estimate of GDP for Quarter 2 (Apr to June) 2015 which showed an increase of 0.2%.

These estimates are consistent with the Quarter 2 (Apr to June) 2015 QNA consistent with Blue Book 2015. Revisions in the data are due to several factors, re-weighting and  re-referencing the indices to 2012 = 100 to align with the National Accounts outputs and the incorporation of late data.

Each component of GDP has a weight within GDP based on its value in 2012. Construction has a weight of 59 in 2012 and contributes 5.9% to GDP; this is lower than the 2011 contribution of 6.4%.

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Construction makes up about 6 percent of Britain's economy.

In the three months to August -- smoothing out what is often volatile monthly data -- output fell by 0.8 percent, the biggest such decline since March 2013, the ONS said.

The expected drag from construction on gross domestic product in the July-September period contrasts with the second quarter when the sector grew by a quarterly 1.4 percent.

An ONS official said the weak figures for construction in August may have been linked to wet weather during the month.

There might be better news ahead for the sector. An industry survey published last week showed growth in construction hit its fastest pace in six months in September, boosted by the revival of residential projects that had been put on hold earlier in the year, before May's national election.

Friday's data showed housebuilding in August fell by 3.0 percent from July and output in other parts of the sector also contracted for the first across-the-board decline since 2010.

House prices have picked up again after a slowdown in the second half of 2014 caused by tighter mortgage lending rules.

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