The construction output figures from the covering the first quarter of 2009 highlight the true nature of the construction recession, or should we say depression, with considerable destocking leading to sharp falls in output. Total output in construction during the first quarter of 2009 fell an unprecedented 16% compared to the same quarter a year earlier, the sharpest fall on record and is in line with forecasts.
Private housing fell 32% in the first quarter compared to a year ago and although recent news from , and the has suggested that there are now "green shoots", it is going to be a while till this feeds through into actual output, especially with orders for the first quarter of 2009 50% lower than a year earlier.
Industrial new build fell 40% compared with a year ago, the largest fall on record and given that new orders in industrial fell a staggering 62% in the first quarter of 2009 compared to a year earlier, industrial output will be expected to fall further during 2009.
Output in the commercial sector fell by 26% in the first quarter of 2009, compared with a year earlier. Over a quarter of the sector has been lost in the past year and with new orders in commercial falling 55% in the first quarter of 2009, compare with a year earlier, output will be expected to fall further.
Even in infrastructure, expected to be buoyed by significant workloads in rail, output in the first quarter of 2009 was 5% lower than one year earlier.
Public housing fell 12% in the first quarter of 2009, compared with a year ago. This is especially disappointing in the light of the government's announcements in the last pre-budget report and and Budget of increased funding for public housing.
Public non-housing rose 7% in the first quarter of 2009 compared with the same quarter one year earlier, still buoyed by work in education and health. Although the state of the public finances means that in the medium term, there must be serious concerns regarding public funding for construction and new orders in the first quarter of 2009 fell 24% compared with a year earlier.
It is not only new work that has been affected by the recession. Private housing repair and maintenance in the first quarter of 2009 fell 10% compared to the previous year and 16% compared with the previous quarter, with lower economic activity and job insecurity hitting consumer confidence and consequently, the home improvements market.
The only solace in these figures is that the first quarter of 2008 saw the highest level of construction output ever and although the latest results from ONS highlight the sharpest fall on record, it is from an all time high. However, this will be of little comfort to contractors who continue to experience difficult conditions throughout construction.
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