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UK construction continues to decline

Thursday, 10 April 2008 11:08 AM

The construction of both private and public housing has shown a sharp slowdown over the last year, according to figures released today by the Office for National Statistics (ONS).

According to the research, private housing orders in the year to February 2008 fell by nine per cent when compared to those in the previous 12 months.

In the shorter term the falls were even more pronounced, with orders in the three months to February down by 13 per cent compared with the previous quarter.

A total of £514 million worth of housing was commissioned in this sector during February this year.

In the public sector the picture was also gloomy.

Public housing and housing association orders fell by 12 per cent in the year February 2008, according to the ONS, while orders were down 24 per cent in the quarter to February when compared to the same period of 2007.

However, the public sector falls are susceptible to larger variations, due to the relatively small size of the sector.

Just £94 million of housing began construction in this quarter during February 2008, with a current market price of £166 million.

Commenting on ONS Construction figures, David Stubbs, Rics senior economist said:

"Today's figures emphasize the dramatic slowing in key parts for the construction sector. New orders for private housing were the lowest since September 2003, while orders for private commercial buildings were the lowest since April 2004," said

"Both sectors are seeing a decline in output versus a year ago as prices for both commercial and residential property decline."

The Rics construction survey also finds the industry is in the doldrums at present.

"With these major engines of the construction sector in decline, and others like public housing also weak, the construction industry will find it hard to grow at all during 2008," continued Mr Stubbs.

Rics also argue, with the housing market slowing down, the government will find it difficult to encourage house building and their target will continue to seem unachievable.

The government has stated it plans to build three million new homes by 2020.

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