Construction output fell by 1.4% in June, which compared with 1.8% growth in May gives a difference month to month of -3.2%. Before this abrupt drop, there had been 7 months of steady growth in construction output, so these latest figures are alarming.
The decrease in the volume of monthly construction output in June came from falls in both new work (2.0%) and repair and maintenance (0.2%).
Usually the construction sector performs well in June, and analysis shows that this month’s fall cannot be explained by the additional bank holiday. Instead there has been a 2% fall in new construction work, meaning that new projects are not starting which is likely due to reduced confidence of construction clients.
We always keep an eye on the construction sector, partly because so many self-employed people work there, and also because construction output is a very good indicator of how well the economy is doing. So today’s figures are not good news at all, and could indicate that the much-discussed recession is upon us.