A sharp fall in new housebuilding in August reversed a long period of expansion in the construction industry, according to official figures.
Output fell for the first time in 18 months as infrastructure spending and building maintenance, which have both remained weak all year, also contracted.
The figures will disappoint the Treasury, which has championed housebuilding as a way out of the current housing crisis. The fall in infrastructure construction will also prove a blow to George Osborne, who has repeatedly said new transport and digital infrastructure is necessary for sustainable growth.
Output fell 3.9% compared with July, said the Office for National Statistics (ONS), dragged down by a 4.8% decline in all types of new work. Only a small rise in public housing offset falls in infrastructure of 6.5%, a 4.9% decline in private industrial and private housing’s 5.5% contraction.
Alan Clarke, head of European fixed-income strategy at Scotiabank, said: “UK construction output got pummelled into the ground in August.” He said the figures would dent third-quarter GDP calculations, though probably by only 0.1%.
via The Guardian
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