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The ONS reported that construction output continued to fall this year; compared to January last year output of all new work was 10% lower in the first month of 2013. On a year-on-year basis output has now been falling for the past 13 months straight. 

The largest falls in new work were concentrated in the public sector; public new housing work was down 29% compared to the first month of last year and other public sector new work was down 24%. Public sector repair, maintenance and improvement work on the other hand was more promising, RM&I for public housing was up 1% compared to January 2012 and other public sector RM&I increased 14% over the same period. 

The move away from new construction work towards a greater emphasis on RM&I is one trend that has been prominent in Glenigan’s own data on project starts, especially with regards to public sector housing. Last year we saw a significantly larger amount of social housing repair and maintenance projects get underway to what has been seen in previous years and this increase is likely to feed through into the official output numbers throughout 2013 as these projects progress on site.

Output of new private housing work also declined in January, down 10% compared to January last year, the fall in official output comes as a bit of a surprise in light of the strength of project starts recorded in Glenigan data over 2012. Infrastructure output in January was flat compared to January last year.

While the output numbers for the first month of the year paint a grim picture of the state of the industry, the actual picture may not be as bad as at first glance. Other factors need to be taken into account that may have depressed the January output data; the particularly bad weather in January for starters would have had a negative effect. Another factor that will have affected the output numbers is the lack of major projects that got underway last year. Glenigan data show that starts of major (£100m+) projects continued to fall in 2012 after falling in previous years. The lack of major projects will weigh heavily on the output numbers even if underlying activity is firm. The positive new orders data for the final quarter of last year and the strong performance of the Glenigan starts data in 2012 do point to some improvement in output as 2013 progresses.


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