UK construction output down 0.7% in March but up 0.2% in Q1

UK construction output fell 0.7% in March, making the third consecutive period of negative month-on-month growth, according to the Office for National Statistics.

The monthly fall was worse than the 0.3% drop estimated in the initial first-quarter gross domestic product release.

For the first quarter, however, construction output rose 0.2%, in line with the estimate included in the preliminary GDP data for January to March.

New housing experienced good growth, up 3.8% on the month, 5.4% on the year and 0.2% on the quarter.

The ONS said repair and maintenance was the main drag on construction output, shrinking both month-on-month and quarter-on-quarter by 1.8% and 0.2%, respectively.

Compared with the same period in 2016, output was up 2.5% in March, marking the 12th consecutive period of month-on-year growth.

Michael Thirkettle, chief executive of interdisciplinary international construction and property consultancy McBains Cooper, said: "After a period of relative stability following Brexit, recent evidence has pointed towards a slowdown in construction as concern grows about what EU withdrawal will mean for the construction industry. These latest figures bear out such concerns.

“Political parties of all stripes are now set to outline ambitious manifesto targets to increase housebuilding but these will be hollow promises unless they are backed by concerted action to address skills shortages and increase access to finance, meaning no end in sight for the housing crisis."

Pantheon Macroeconomics said: "Looking ahead, shortages of existing homes coming on to the market and the Government’s Help to Buy Scheme should continue to support housebuilding. The Government’s plans to invest more this year also will boost the infrastructure and public sectors. But with Brexit likely to cast a shadow over investment in industry and City office space, the construction sector still looks set for a tough year."