The ONS today released its latest construction output data for 2015 Q4 and December. At first glance, the data reveals a number of revisions going back to January 2015 mainly due to the inclusion of late data submissions. But let’s take a closer look at what the latest figures have to say.
In Q4, total construction output fell 0.4% on a quarterly basis. This reflects a downward revision of 0.3 percentage points from the figure released in the preliminary estimate of GDP published in January. This comes as disappointing news as expectations were for an upward revision once the ONS incorporated more data into its calculations. In addition, this follows a 1.7% quarterly decline reported in Q3, which places the construction industry into technical recession. In Q4, on an annual basis, output rose 0.4%, although this was the lowest annual increase since 2013 Q1 and slowed from growth of 1.4% reported in the previous quarter.
Looking at the monthly figures, in December, output increased 1.5% following a decline of 1.1% in November. All new work rose 2.6%, with infrastructure being the main contributor, growing 12.0% compared to November, and its highest month-on-month increase since the start of 2015. In the three months that make up Q4, output contracted in only one month. Although output rose in December, this still wasn’t enough to offset the decline, with Q4 ending up with negative growth.
So how do the monthly figures from the latest release compare with January’s release?
October: According to the January release, construction output in October increased 0.2% on a monthly basis and by 1.0% on an annual basis. The latest release reflects an upward revision, showing monthly and annual growth rates of 0.4% and 1.7%, respectively.
November: The January release reported that output in November fell 0.5% month-on-month and by 1.1% year-on-year. In monthly terms, the latest release shows a downward revision with growth at -1.1% for November; however, on an annual basis, output was revised up (-0.9%).
Figure 1: Construction output
As ever, it’s always worth pointing out that monthly data are volatile and are likely to be revised further in the coming monthly data releases.