ONS says construction output down 0.9% in June

UK construction output declined in June but there is ?little anecdotal evidence? to suggest that the EU referendum has had an impact, the Office for National Statistics said on Friday.

New figures show a 0.9% decrease in construction output in June 2016 compared with May 2016.

For the second quarter as a whole, output in the construction industry fell by an estimated 0.7% compared with the first three months of the year. According to the ONS, downward pressure on the quarter came from all new work, which decreased by 0.8%, and repair and maintenance which was down 0.5%.

Compared with the second quarter of 2015 output decreased by 1.4%, with new work falling by 1.7% and repair and maintenance down 0.8%. The statistics agency noted that this was the first year-on-year decrease since the first quarter of 2013.

The report mainly covers the period in the run up to the 23 June referendum in which UK voters decided to leave the European Union.

Builder & Engineer magazine quoted Shraga Stern, director at London-based construction firm Decorean, who said that the dip is no cause for alarm and may reflect the time of year rather than the influence of Brexit.

?Although construction output dropped by 0.9% in June, we don?t believe there is a need for any panic in the industry,? Stern said.

?Historically, the broader industry experiences a dip in the summer months anyway, so we do not necessarily believe this has been caused by Brexit.

?In our day-to-day operations as a housebuilder, we have still seen an appetite and believe that other markets within construction will recover very soon.

?As is the case with any slowdown or dip in a market, patience is key. We firmly expect the entire market to recover as the year progresses.?

Samuel Tombs from Pantheon Economics, quoted by BBC News, was less optimistic. He said that Brexit negotiations are likely to take some time, and businesses will postpone major capital expenditures.

?In addition, the public investment plans won?t be reviewed until the Autumn Statement at the end of the year and few construction projects are genuinely ?shovel ready?,? Tombs continued.

?Accordingly, we continue to think that a slump in construction activity will play a key role in pushing the overall economy into recession over the coming quarters.?