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Construction output contracted in Q2

ONS data published recently shows that construction output contracted 1.3 percent in the second quarter of 2019, reversing the 1.4 percent growth recorded in Q1 and contributing to a fall in UK GDP, along with the manufacturing sector.

On a quarterly basis, output fell in all sectors except commercial, public housing and public housing repair, maintenance and improvement. On an annual basis, Q2 output was 1.4 percent higher, led by housing and infrastructure.

Rebecca Larkin, senior economist at the Construction Products Association, commented: “The sharpest decline in construction activity was the 0.7 percent monthly fall in June, as a result of unseasonably bad weather delaying work on-site, particularly in the repairs, maintenance and improvement sectors, which account for around one-third of overall output.

“However, even though construction lost £521 million in output compared to Q1, the volume of activity was still higher than a year ago. This was driven by clear pockets of activity in house building by housing associations and local authorities, with public housing output reaching a record high level in Q2 and although output fell in quarterly terms for private housing and infrastructure, output from these sectors remains at a historically high level.

“The performance of other sectors such as commercial offices and retail, industrial factories is less convincing against the backdrop of Brexit uncertainty that complicates decision-making on investments with a high up-front outlay.”

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