UK construction sector output fell by 2.4% quarter-on-quarter in the opening three months of this year on a seasonally-adjusted basis, and is at its lowest level since the end of 1998, official figures have shown.
The data, published yesterday by the Office for National Statistics, highlight a widespread fall in new work for the construction sector. This drop occurred against the backdrop of the Coalition Government's continuing austerity programme.
The drop in construction output in the first quarter was broadly in line with a fall of 2.5% estimated by the ONS when it reported last month that UK gross domestic product had risen by 0.3% in the first quarter of this year.
Howard Archer, chief UK economist at consultancy IHS Global Insight, said: "While the construction sector only accounts for 6.8% of total UK output, the extent of its weakness means that it once again weighed down on GDP growth in the first quarter of 2013, after being a major drag on GDP in 2012.
"Construction output knocked 0.6 percentage points off GDP growth in 2012 which was limited to 0.3%. Construction output then knocked a further 0.2 percentage points off GDP growth in the first quarter of 2013."
Analysing the fall in UK construction output in the opening three months of this year, the ONS said: "The quarter-on-quarter fall into Q1 2013 was dominated by the decline in all new work, which fell 3.2%.
"There were falls in almost all sectors, with the exception of private housing repair and maintenance which showed a modest increase of 0.4%."
The ONS said that construction output in the first quarter was down 6.5% on the opening three months of 2012.
Mr Archer noted that unadjusted data from the ONS showed UK construction output rose by 12.1% month-on-month in March.
However, he cautioned: "While the gain in March looks impressive, it must be put in the context that the data are not seasonally adjusted, and construction output normally rises appreciably in March compared to February. Significantly, construction output was still down by 7.4.% year-on-year in March."
A survey published last week by the Chartered Institute of Purchasing and Supply showed UK construction activity fell for a sixth consecutive month in April, with the civil engineering and commercial property sub-sectors suffering further sharp drops in output.
The survey signalled a slowing rate of decline.
However, it also showed an 11th straight month of falling new orders for the UK construction sector. This is the longest run of decline in new orders since 2008/09, the period of the Great Recession.
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