British construction output slips in fourth quarter

British construction output slipped more than expected in the fourth quarter of 2015, dragged down by reduced infrastructure spending despite housebuilding increasing at the fastest pace since the start of 2014.

Construction output fell 0.4% in the fourth quarter after a 1.7% decline in the third quarter, the UK’s Office for National Statistics said yesterday. While a bigger drop than the estimate used in preliminary fourth quarter GDP figures, the ONS said that even when combined with the downward revision to industrial output figures, earlier this week, they would have only a negligible impact on growth rates.

UK construction output rose 1.5% in December alone, in line with economists’ forecasts after a 1.1% drop in November.

For 2015 as a whole, construction output grew by 3.4% — faster than the economy as a whole, but slower than the 7.5% expansion chalked up in 2014.

Total construction output, in the UK, is still 4.1% below its level in early 2008, just before Britain fell into recession.

A steep decline in construction output in the third quarter helped drag on economic growth which matched its lowest rate since late 2012 over that period.

Output in the housebuilding sector rose at its fastest rate since the middle of 2014, growing by 4.1% after a 5.7% decline in the previous quarter.