Construction output continued to decline in the second quarter of 2012 after a contraction of almost 6% in the first quarter. Output was also down by 9% year-on-year at £24.5bn. Repair and maintenance output fell by 1.6% over the previous quarter, while new work fell by 3.8% in the 3 months to June 2012. Output declined across all new work sectors except industrial which was unchanged at £815m.
The private housing sector also saw a decline of 6.5% after output reached its highest level for two and a half years in the first quarter of 2012. Continuing weakness in the wider economy and credit constraints is affecting demand as potential homebuyers are unable or reluctant to take on mortgage debt while rising unemployment remains.
Public housing output fell by the lowest level for over two years, 5.6% to £891m. Funding cuts beginning to effect output as housing associations are still adapting to raising money from private sources. Public non-residential output fell by 4% during the quarter, as work continued to complete on the Building Schools for the Future projects-those that got out when the project was axed in 2010. In the commercial construction sector output fell by 1% after a decline of 11% in the first quarter of 2012. New work construction orders dropped 8% quarter on quarter in the 3 months to June.
Public non-residential new work orders rose by 14%, quarter on quarter, public housing new orders also rose by 4%. Infrastructure new orders fell by 20% during the quarter, although still up 39% on an annual basis at 1.9bn. Industrial construction orders fell by 26%, quarter on quarter, while the decline was 17% for the commercial sector. Overall output is not set to rise until 2014 while the full impact of public spending cuts yet to be felt in the construction industry and the continuing weakness in the wider economy doing little to invest in the private construction sectors.
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