Bad weather weighs on construction industry as output stumbles

The UK's construction output fell in November last year Photo: David Davies/PA Wire
The UK's construction output fell in November last year Photo: David Davies/PA Wire
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BRITAIN’S construction output unexpectedly fell in November, in the latest sign that the economy may struggle to bounce back strongly from a mid-year slowdown.

Construction output fell 0.5 per cent on a monthly basis in November, the Office for National Statistics said, against expectations for a rise of 0.5 per cent in a poll of economists.

On an annual basis, output dropped 1.1 per cent, versus expectations that it would stagnate in that month.

The ONS said bad weather may have weighed on the construction industry which accounts for around six per cent of gross domestic product.

A steep decline in construction output in the third quarter weighed on economic growth which matched its lowest rate since late 2012 over that period.

Construction output fell 1.9 per cent in the third quarter of 2015.

The ONS said construction output would have to increase by 2.6 per cent month-on-month in December to avoid a fall for the fourth quarter as a whole.

Infrastructure posed the biggest drag on the data, falling 4.3 per cent in November, its biggest fall since June 2014.

Housebuilding growth slowed to 0.9 per cent in November from 1.9 per cent the month prior.

Recent surveys have pointed to a strong pick-up in house prices, with the shortage of housing supply expected to keep the market under pressure.

A survey released earlier this month found that manufacturing “ticked over” in December, and made only a marginal contribution to economic growth in the final quarter.

The Markit/CIPS UK manufacturing PMI fell to 51.9 in December, down from 52.5 in November and October’s measure of 55.5. Any figure over 50 indicates expansion.

“This suggests that industry will make, at best, only a marginal positive contribution to broader economic growth in the final quarter of the year, ” said Markit senior economist Rob Dobson.

Lee Hopley, chief economist at EEF, the manufacturers’ organisation, said earlier this month: “December’s PMI reading points to manufacturing ending 2015 with neither a bang nor a whimper.”