Michael Ankers: not expecting a return to growth until 2013.

CPA challenges ONS construction output report

Published:  28 April, 2011

UK: The Office of National Statistics' latest figures indicate a 0.5% rise in GDP, but a fall in construction output for the first quarter of 2011. These figures are being contested by the Construction Products Association. 

Commenting on the figures, CPA chief executive, Michael Ankers said: "Today's GDP estimate includes a fall in construction output of 4.7% in the first three months of the year. The scale of this fall in the official figures is extremely surprising and is not consistent with information from construction industry surveys or the experience of the companies and sectors that the CPA represents.

"The indications are that the construction industry performed better in the first three months than the ONS figures suggest.

"The industry was helped partly by an element of 'bounceback' from the last few weeks of 2010 when the extreme weather severely curtailed construction activity in many parts of the country. It was also aided by the exceptionally mild and dry weather throughout the whole of the first quarter of the year," said Mr Ankers.

He admitted that looking forward, the outlook remained very uncertain. "The real challenge for the industry is the effect of the public spending cuts in the Comprehensive Spending Review which only really started to have an impact from the beginning of the new financial year in April," he said.

"In the short-term we do not believe that construction spending in the private sector will be sufficiently strong to compensate for these cuts. As a result, the CPA's latest construction forecasts – published in mid-April and put together by representatives from across the construction industry – anticipate a fall in output of 1% this year compared with 2010 and a further 2% fall in 2012," Mr Ankers said.

He added that the CPA was not anticipating a return to growth until 2013. "Inevitably, this will be a constraint on recovery in the wider economy as construction accounts for nearly 10% of GDP," he commented.

GDP figures reinforce the case for construction industry recovery strategy, north of the border, according to the Scottish Building Federation. Its chief executive, Michael Levack, said: "The new figures demonstrate the challenges the industry continues to face as we move into a new financial year and a Scottish budget year where public capital investment will be cut by 21% or £686m.

"More effort is still required to foster recovery in the private sector to offset the substantial cuts in public investment the industry now faces."

Mr Levack went on to say that the SBC had set out a clear strategy to deliver sustainable recovery in Scotland's construction industry.

"Today's figures add further weight to our call on Scotland's politicians to implement that strategy as a matter of urgency once the new Scottish Parliament is elected on 5 May."

Michael Levack: more effort needed to boost public sector recovery.

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