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Construction Output Revisions

Following concern regarding the construction output data in March’s data release, which indicated that the construction industry had technically entered recession in Q1, the ONS introduced an interim revision to the output price deflators in April.  The result of the interim deflators has been to revise up construction output in 2014 and Q1, erasing the construction ‘recession’.

In the March release, the ONS reported that construction output for the whole of 2014 grew by 7.4%. Following the revision in April, which added £3.7 billion to industry activity, construction output in 2014 increased 9.5% compared to the year earlier.  This was primarily due to upward revisions in new work across all sectors.  Consequently, output in the industry totalled £123.7 billion, £2.3 billion higher than the previous release.

In 2014 Q4, on a yearly basis, construction output was revised up to 8.9% from 4.5% in the March release.  Similarly, on a quarterly basis, construction output increased by 0.2%, an upward revision from the March release which reported a 2.2% fall in output.

In Q1, according to the April release, total construction output rose 4.4% year-on-year compared to a 0.3% fall reported in the March release.  Quarterly growth rates recorded a 0.2% fall in output (still a decrease but revised from a 1.1% fall in the March data).  Based on the revisions, £1.3 billion and £1.5 billion of additional construction output was added in Q4 and Q1, respectively.


Figure 1: Quarterly path for output in the construction industry


Major revisions

  • Housing

Based on the latest revisions in April, 2014 saw a 25.6% increase in total housing, an upward revision from 22.6% growth in the March release.  As a result of the revisions, the housing sector was worth
£27.1 billion in the April release, a £0.6 billion rise from the previous release.  In the April release, total housing output in Q1 fell 2.1% on a quarterly basis, revised up from -3.4% in the March release.  On an annual basis, however, output in the housing sector rose by 10.0%, an upward revision from 5.0% in the March release.


Figure 2: Output in the housing sector


  • Infrastructure

Infrastructure output grew by 0.3% in 2014, according to the April release compared to a 1.0% fall seen in the March release.  Consequently, the latest revisions in April show that the infrastructure sector was valued higher by £0.2 billion to £13.4 billion.  Quarterly growth rates in the April release were revised upwards to 9.3%, compared to 4.5% in the March release.  In annual terms, growth rates were revised up to 15.8% in the April release from 4.6% in the March release.


Figure 3: Output in the infrastructure sector

  • Commercial

According to the April release, the commercial sector expanded by 3.9% in 2014, an improvement from no growth reported in the March release.  Following the revisions, the value of the commercial sector was £23.0 billion in 2014, a £0.9 billion increase from the March release.  In Q1, according to the April release, output in the commercial sector fell on a quarterly basis by 2.0% compared to a 3.0% quarterly fall reported in the March release.  However, on an annual basis, commercial output rose by 0.1%, an improvement from the March release which recorded a 7.8% decrease.


Figure 4: Output in the commercial sector

The introduction of the new, interim output price deflators is a temporary solution.  What will be needed going forward is a long-term solution to ensure that issues similar to those over the past few months do not occur.  The CPA will continue to work closely with the ONS to improve the accuracy of the industry’s performance data.

By Amandeep Bahra at 19 Jun 2015, 10:48 AM


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