Construction output falls in the three months to December

Emma Haslett
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The data could dent UK GDP growth (Source: Getty)

Another month, another fall in construction output: this time, the figure fell 0.4 per cent between October and December, compared with the quarter before.

That's a downward revision of 0.3 percentage points from the figure included in the Office for Nationals Statistics' (ONS) GDP estimate - meaning, essentially, that the UK's GDP growth for the final quarter of 2015 may be revised down.

Or, as Samuel Tombs, chief UK economist at Pantheon Macroeconomics, tweeted:

There was a bit of good news: construction output actually increased between November and December, by 1.5 per cent, which the ONS put down to a 2.6 per cent increase in new work. That said, repair and maintenance fell 0.5 per cent.

“The worse than expected number follows disappointing news of a larger than previously thought 0.5 per cent decline in industrial production in the closing quarter of last year," pointed out Chris Williamson, chief economist at Markit.

"The combined weakness of industrial production and construction poses downside risk to the initial estimate of 0.5 per cent GDP growth in the final quarter of last year, but we would need to see other sectors’ figures also nudged lower for growth to be revised down to 0.4 per cent.

"As usual, we treat the data with caution, as the numbers have in the past been revised significantly. However, although any revisions are likely to be upward, on the basis that Markit/CIPS PMI survey data have shown a stronger underlying trend in recent months, warning lights are flashing over the health of the construction sector. Even the survey data have shown signs of weakness, with January numbers registering the smallest monthly expansion of output for nine months, and one of the worst months seen over the past three years."

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