Statistical bulletin: New orders in the construction industry, Q2 2011

Headline Figures

• New orders in the second quarter of 2011 fell by 16.3 percent in comparison with quarter one.
• The total volume of all new orders is now at its lowest total since the third quarter of 1980.
• New construction orders fell by 23.2 percent compared with the same period in 2010.
• Private industrial was the only sector which showed a positive growth from the first to the second quarter (6.6%).

Introduction

This bulletin shows new orders in the construction industry for the second quarter of 2011

Orders for new construction

Construction new orders total

Source: Construction: Contracts & New Orders - Office for National Statistics

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Orders for new construction (constant (2005) prices, seasonally adjusted)

Great Britain

Table source: Office for National Statistics

Table notes:

1. (R) = Revised data
2. (R1) = Revisions due to 1) implementation of a new deflator series (which had already been implemented in Q1 2010 for periods Q4 2009 onwards) and 2) revised seasonal factors
3. (R2) = Revisions due to revised seasonal factors
4. (R3) = Revisions due to 1) additional data from businesses, 2) implementation of updated parameters used for treating outliers, 3) use of updated assumptions regarding main contractor population, 4) use of updated business register information from the IDBR, 5) updated deflator estimates from BIS and 6) revised seasonal factors
5. (See background note 4 for further details)

New housing

The volume of private housing in the second quarter of 2011 fell by 7.7 per cent compared with the previous quarter but rose by 20.6 per cent compared with the same period a year earlier. These are based on constant price seasonally adjusted estimates.

Public housing orders in the second quarter of 2011 fell by 31 per cent compared with the previous quarter and fell by 31.6 per cent compared with the same period a year earlier and is at its lowest value since the first quarter of 2009.

New Housing

Source: Construction: Contracts & New Orders - Office for National Statistics

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New public and private infrastructure

The volume of infrastructure orders in the second quarter of 2011 fell by 25.9 per cent compared with the previous quarter and fell by 44.2 per cent compared with the same period a year earlier and is at its lowest value since the first quarter of 2006.

New public and private infrastructure

Source: Construction: Contracts & New Orders - Office for National Statistics

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New public non-housing excluding infrastructure

The volume of public non-housing excluding infrastructure orders in the second quarter of 2011 fell by 30.2 per cent compared with the previous quarter. It fell by 43.1 per cent compared with the same period a year earlier and is at its lowest value since the first quarter of 2001.

New public non-housing excluding infrastructure

Source: Construction: Contracts & New Orders - Office for National Statistics

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New private non-housing excluding infrastructure

The value of private commercial orders in the second quarter of 2011 fell by 5.4 per cent compared with the previous quarter and fell by 13.2 per cent compared with the same period a year earlier.

Private industrial orders in the second quarter of 2011 rose by 6.6 per cent compared with the previous quarter and fell by 10.1 per cent compared with the same period a year earlier.

New private non-housing excluding infrastructure

Source: Construction: Contracts & New Orders - Office for National Statistics

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Revisions

In general, revisions will follow the standard revisions policy for construction statistics shown in the table below

Revisions policy

Table source: Office for National Statistics

Table notes:

1. *Includes parameters for treatment of outliers and weights for adjusting estimates for main contractors

Sources of revisions to the new orders series in Q2 2011 are as outlined in the table above and in note 4 of Background Notes.

Revisions to new orders (constant (2005) prices, seasonally adjusted)

Quarter on previous quarter growth rates

Table source: Office for National Statistics

Background notes

1. Statistical bulletins for new orders are produced quarterly. Publication dates in 2011/2012 have been placed on the forward release calendar.

2. An article describing the improvements made to New Orders and Output in the construction industry was published in ONS’s Economic and Labour Market Review in March of 2010. See ‘Development of construction statistics’ (135.4 Kb Pdf) .

3. An explanation of the changes introduced in 2010 and the impact this has had on the published series (115.6 Kb Pdf) is available.

4. Standard revisions to the new orders series include late responses from contributors, revisions to the price indices used to deflate the current prices to constant (2005) prices and due to seasonal adjustment.

   For this publication, we are taking the opportunity to carry out a number of additional revisions to improve the series.

   We have addressed the issue regarding the equalisation of the current price (CP) and the constant price (KP) series in the 2005 base year. This change was notified in the quarter 4 2010 statistical bulletin, following the decision by National Accounts to adopt the 2007 Standard Industrial Classification in 2011 and to take on growth revisions back to at least 1997. This has allowed construction statistics to revise its KP series so that CP and KP are equal in the 2005 base year. Furthermore, we are taking this opportunity to apply the new deflators, introduced in Quarter 1 2010, back as far as they are available (to quarter 3 2002). These improvements have resulted in amendments to the growths and have increased the levels of the series prior to quarter 1 2010.

   We have also undertaken the planned re-assessment of the parameters used for dealing with outliers (unusually large returns from businesses). This has resulted in a small change to the parameters which will increase estimates as fewer outliers will be treated. These have been applied from Q4 2010. These parameters will continue to be monitored and improvements will be introduced if it is considered that they will improve the accuracy of our estimates.

   Additionally, we have amended the assumptions we make regarding the universe of main contractors in the construction population, now that we have more information from this survey and from the Business Register and Employment Survey (BRES). These assumptions have been changed from Q4 2010 and have increased the overall level of estimates. These assumptions will continue to be monitored and amended in future as required.

   Finally, the current price estimates in quarter 4 2010 have been revised (downward) following an update to the universe of businesses in the Inter Departmental Business Register (IDBR). The change has the greatest impact on Q4 2010 as it is furthest removed from the previous update.

5. ONS launched a new website on 28 August 2011 which has improved the way users can access our statistics. However, many existing bookmarks and links no longer work and users will need to update them.

6. Relevance to users

   The statistical bulletin brings together information on orders for new construction in Great Britain. It draws on data compiled from the Quarterly Survey of Contracts and New Orders, with businesses selected from the Inter-Departmental Business Register (IDBR). The construction industry, which contributes to the overall estimate of Gross Domestic Product (GDP) by approximately 6 per cent, covers Sections 41, 42 and 43 of the Standard Industrial Classification 2007 (excluding section 41.1 (property developers)).

7. Accuracy

   Revisions to previous periods: figures for the recent periods are provisional and subject to revision, mainly in the light of revisions to deflators. Current price figures are revised back one quarter.

8. Deflation and seasonal adjustment

   The headline data are given in constant 2005 prices, seasonally adjusted. Deflators adjust the value series to take out the effect of price changes to give the volume series. Deflation of output is carried out sectorally and a range of relevant tender price and output price indices are used.

9. Seasonal adjustment aids interpretation by removing annually recurring fluctuations, for example, due to climate, hours of daylight, holidays or other regular seasonal patterns. Unadjusted data are also available.

10. Further information

    Releases on construction output and employment prior to the transfer to ONS can be found on the BIS website.

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12. Publication policy

    Details of the policy governing the release of new data are available from the press office. Also available is a list of the names of those given pre-publication access to the contents of this release.

13. National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.

14. As a valued user of our statistics, we would welcome feedback on this release. In particular, the content, format and structure. Please send feedback to the following postal or email address:

    Construction, Capex and Stocks Statistics, Room 2301, Office for National Statistics, Government Buildings, Cardiff Road, Newport, Gwent, NP10 8XG

    Email: construction.statistics@ons.gsi.gov.uk

15. You may re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence visit The National Archives or write to the Information Policy Team, The National Archives, Kew, LondonTW9 4DU, or email: psi@nationalarchives.gsi.gov.uk. © Crown copyright 2011.

16. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

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