U.K. Construction Industry on Course for Quarterly Decline
(Bloomberg) -- U.K. construction output unexpectedly fell in August as infrastructure work shrank at the fastest pace in nine months, putting the building industry on course to contract in the third quarter.
Production declined 1.5 percent from July, the Office for National Statistics said on Friday. An unchanged reading was expected by economists in a Bloomberg survey. It left output down 1.3 percent in the latest three months, the biggest drop since last October.
Almost every category of building work fell in August, with infrastructure dropping 5.1 percent -- enough to account for almost half the overall decline. The ONS said the fact that infrastructure is dominated by public-sector work means it is “unlikely” that uncertainty following the June Brexit vote is having an impact.
Still, construction appears set to shrink for a second straight quarter, despite an upward to revision to July. Output will fall unless September sees an unprecedented gain of 5.2 percent.
“Survey data provide a ray of hope, suggesting conditions may have stabilized in September, but it's clear that the sector remains under pressure from widespread uncertainty about the economic outlook and that growth has, at the very least, consequently slowed considerably since earlier in the year,” said Chris Williamson, an economist at IHS Markit.
Relying on Services
With industrial production also set to decline, it leaves the task of keeping the economy growing to the services sector. The first estimate of GDP for the quarter will be published Oct. 27, with economists expecting a sharp slowdown from the second quarter's 0.7 percent growth.
New construction work fell by 1.4 percent in August and repairs and maintenance dropped 1.5 percent. Besides infrastructure, the weakest areas were public housing and private industrial work.
Economists have warned that the building industry may ultimately be hit hard as the decision to leave the European Union leads to projects being put on hold and accelerating inflation erodes consumer spending.
Despite the spur to exports from a more competitive pound, economic growth is widely expected to slow to less than 1 percent next year.
To contact the reporter on this story: Andrew Atkinson in London at a.atkinson@bloomberg.net. To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net.
-
Signature Play: The Classic Cocktail Is Dead. Or Is It?
Classic cocktails are disappearing from India's cocktail menus. But they're still being ordered, taught to bartenders and borrowed from. So, who's really having the last drink?
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
