UK Construction Output Dips in July as House-Building Falls

British construction output unexpectedly dipped in July on the month, reversing a bounce seen in June, after the biggest annual fall in house-building in more than two years, official data showed on Friday.

Construction output fell by 1.0 percent on the month, bucking economists’ forecasts of a 0.5 percent pick-up after an unrevised 0.9 percent rise in June.

Compared with a year earlier, output fell by 0.7 percent, again disappointing economists’ forecasts of a 0.6 percent rise.

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 percent, the first decline since March 2013.

Construction of public housing fell by a hefty 15.6 percent, while the 0.8 percent growth in private construction was the slowest since March 2013 as well.

Construction fell sharply after the financial crisis and was slow to recover, but gained pace last year before easing in early 2015.

Only on Thursday, the Royal Institution of Chartered Surveyors pointed to a lack of housing as driving the biggest price rises in over a year. It estimates overall property prices will rise 6 percent in Britain this year.

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


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.