The UK's construction sector is on its longest losing streak since 2012

 
Emma Haslett
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The UK's construction sector has been weakening for eight consecutive quarters. (Source: Getty)

Output in the construction sector fell for the eighth month in a row yesterday, putting it on its longest losing streak since 2012.

Figures from the Office for National Statistics (ONS) showed growth contracted by 0.7 per cent in the three months to December, the third consecutive quarter of decline.

However, the figures also showed construction output grew 5.1 per cent during the whole of 2017, largely thanks to strong growth during the end of 2016 and the beginning of 2017.

Data published last week showed things are unlikely to pick up during the first quarter of this year, suggesting it had almost ground to a halt in January, with its closely-watched purchasing managers' index dropping to 50.2, only just above the 50 level which indicates growth.

The pound fell off a high of $1.3979 to $1.3915 in morning trading, as a combination of the weak construction figure and a wider trade deficit shook investors.

"Today’s figures show a continuing stagnation in output – likely to be in no small part due to UK developers still circumspect about what the Brexit deal will look like before they commit to further investment," said Michael Thirkettle, chief executive of construction consultants McBains.

"The falling value of the pound is still impacting on the cost of materials, further stifling large-scale development.

“The construction industry will be hoping the next set of figures for January give some New Year cheer, although the provisional outlook from other surveys is looking pessimistic while the ‘Carillion effect’ is also unknown – its liquidation could have a significant impact on the fortunes of tens of thousands of sub-contractors."

Read more: Commercial projects weakness holds back construction sector

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