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Opinions differ over construction output

CPA says government figures showing fall in construction output in first quarter not consistent with industry surveys

THE Office for National Statistics (ONS) this week released figures indicating a 0.5% rise in GDP, but a 4.7% fall in UK construction output, for the first quarter of 2011. Despite the overall increase, the Construction Products Association has questioned the size of the fall in construction output suggested in the official figures, saying its own data indicates some signs of improvement since the start of the year.

Commenting on the ONS figures, the Association’s chief executive, Michael Ankers (pictured), said: ‘The GDP estimate includes a fall in construction output of 4.7% in the first three months of the year. The scale of this fall in the official figures is extremely surprising and is not consistent with information from construction industry surveys or the experience of the companies and sectors that the Association represents.’

He continued: ‘The indications are that the construction industry performed better in the first three months than the ONS figures suggest. The industry was helped partly by an element of ‘bounce back’ from the last few weeks of 2010, when the extreme weather severely curtailed construction activity in many parts of the country, and also by the exceptionally mild and dry weather throughout the whole of the first quarter of the year.’

Nevertheless, looking forward, Mr Ankers warned that the outlook remained very uncertain.

He said: ‘The real challenge for the industry is the effect of the public spending cuts in the Comprehensive Spending Review, which only really started to have an impact from the beginning of the new financial year in April, and in the short term we do not believe that construction spending in the private sector will be sufficiently strong to compensate for these cuts.’

The Construction Products Association’s latest forecasts, published in mid-April and put together by representatives from across the construction industry, anticipate a fall in output of 1% this year, compared with 2010, and a further 2% fall in 2012.

‘We are not anticipating a return to growth until 2013, and inevitably this will be a constraint on recovery in the wider economy as construction accounts for nearly 10% of GDP,’ said Mr Ankers.

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