The UK's construction output just fell by the most since 2012

 
Emma Haslett
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Building Development Along The Thames In East London
Output in construction was driven lower by a fall in new work (Source: Getty)

The UK's construction output fell by 1.2 per cent in May, figures published by the Office for National Statistics (ONS) have shown.

Output in the sector also fell 1.2 per cent in the three months to May, its fourth quarterly fall in a row, and its biggest drop since September 2012.

The ONS said the main fall came from so-called new work, including infrastructure, which fell four per cent in May following strong growth in April.

The news came after Markit's purchasing managers' index (PMI) for the sector, published this week, undershot economists' expectations in June, thanks to slowing growth in the housing, commercial and infrastructure sectors.

The news came as the ONS published figures showing the UK's trade deficit widened by almost £2bn in the three months leading up to May, while industrial production missed expectations. The combination of the two sent the pound 0.4 per cent lower against the dollar, to $1.2919.

"With these outturns coming on the back of several months of soft data, it is now virtually certain that both [the industrial and construction] sectors will drag on GDP growth in the second quarter," said Howard Archer, chief economic adviser to the EY Item Club.

“Based on today’s data and the business survey results for June, we now think that industrial production is likely to have contracted by 0.5 per cent in the second quarter, with construction output down 1.8 per cent.

"And though an improved performance from the services sector will provide some support, GDP is likely to have grown by just 0.3 per cent with the risks to that projection skewed to the downside.”

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