UK construction output dips in July as housebuilding tumbles

http://www.theguardian.com/business/2015/sep/11/uk-construction-output-fall-july-housebuilding

Version 0 of 1.

British construction output dipped unexpectedly in July, reversing a bounce in June, after the biggest annual fall in housebuilding in more than two years.

A major driver of the decline was a year-on-year fall in the amount of new housing being built, which dropped by 2.5%, the first decline since March 2013.

Construction output fell by 1.0% on the month, bucking economists’ forecasts of a 0.5% pickup after an unrevised 0.9% rise in June, the Office for National Statistics said. Compared with a year earlier, output fell by 0.7%, compared with forecasts of a 0.6% rise.

Construction of public housing fell by a hefty 15.6%, while the 0.8% growth in private building work was the slowest since March 2013. Construction fell sharply after the financial crisis and was slow to recover, but gained pace in 2014 before easing early this year.

On Thursday, the Royal Institution of Chartered Surveyors said a lack of housing was driving the biggest price rises in more than a year. It estimated that property prices would increase by 6% this year.

Construction makes up 6% of Britain’s economy, but the data is volatile, especially on a monthly basis, and can contribute to significant revisions to overall GDP.

However, the ONS did not revise the 0.2% growth rate it recorded for the sector in the second quarter, saying it would wait until more comprehensive annual statistical revisions were made to Britain’s official data this month.

Separately, the ONS said it did not expect these revisions to annual rates of GDP growth to differ much from provisional estimates it made on 5 August. These had pointed towards upward revisions for growth in 2011, 2012 and 2013.