Concern grows over official data on construction output

15 May, 2015

CPA says falls in Office for National Statistics construction output not reflected in latest industry surveys

DESPITE a number of recent positive industry surveys, the Office for National Statistics (ONS) has today reported falls in construction output for the fourth quarter of 2014 and the first quarter of 2015, suggesting that the construction industry has technically entered recession.

If the ONS figures are correct, in the first quarter of 2015, output in the construction industry is estimated to have decreased by 1.1%, compared with the fourth quarter of 2014, and between the first quarter of 2014 and the first quarter of 2015, output is estimated to have declined by 0.3%, marking the first year-on-year fall since the second quarter of 2013.

However, the Construction Products Association (CPA) has pointed out that the official data contradict a growing body of recent evidence from itself and other industry sources.

Indeed, earlier this week the CPA’s latest Construction Trade Survey reported an eighth consecutive quarter of growth in activity in the first quarter of 2015, with large contractors, SMEs, civil engineers and product manufacturers all enjoying growth in output in the first three months of the year, and with further expansion is anticipated throughout 2015.

According to the Association, this represents the construction industry’s longest expansionary streak in the last six years.

Several other independent organizations, including Experian and Markit/CIPS, have similarly reported growth in construction activity. These findings were reinforced this week by the Bank of England, which published its latest Inflation Report highlighting concerns with the comparative figures.

The CPA says it wrote to the ONS to raise this issue following the release, last month, of the original 2014 fourth-quarter estimate. The two organizations met earlier this month and are currently working together to resolve what the CPA considers to be discrepancies in the way the official data are produced.