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New construction orders lowest in three years

Office for National Statistics (ONS) figures have shown that new orders in construction have fallen to the lowest they have been in the past three years. 

The CPA has commented on recent ONS data showing a fall in new construction orders.

Construction output in July fell by 0.9 percent and was 0.4 percent lower compared with one year earlier. New orders in Q2 declined 7.8 percent and fell 12.6 percent on an annual basis.

Rebecca Larkin, senior economist at the Construction Products Association (CPA), commented: “Data from the ONS confirms that alongside a 1.3 percent contraction in output in Q2, new orders in construction hit the lowest level since 2014 Q1.    

Ms Larkin continued: “In particular, the sectors suffering the largest falls were the industry’s largest three: private housing, commercial and infrastructure. Commercial new orders began tailing off in the second half of 2016 and are 11.2 percent lower since the EU Referendum.

“Whilst this downward trend was expected amid the rising uncertainty giving way to a reluctance to invest in new offices space, private sector house building and infrastructure are the key drivers of growth in the CPA’s forecasts for 2018 and 2019.

“New orders in these key sectors were the lowest since 2015 and highlight that there are now lower volumes of work queued up in the pipeline.

“Nevertheless, for the year to date, construction output is still 1.3 percent higher than a year ago. The weakness in new orders is factored in to the CPA’s forecasts for 2018, with construction growth slowing to 0.7 percent as activity on projects reaching an end is not replaced at the same rates.”

11 September 2017

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