Statistical bulletin: Output in the Construction Industry, December and Q4 2011

Headline figures (constant (2005) prices, seasonally adjusted)

• The total volume of construction output in the fourth quarter of 2011 fell slightly by 0.5 per cent compared with the third quarter of 2011.
• The total volume of construction output in the fourth quarter of 2011 grew by 0.9 per cent compared with the same quarter in 2010.
• In comparison with 2010, the total volume of construction output in the whole of 2011 grew by 2.8 per cent.
• By sector, in the fourth quarter of 2011, all new work fell by 0.6 per cent, and repair and maintenance fell by 0.3 per cent compared with the third quarter of 2011.
• By sector, in the fourth quarter of 2011, all new work grew by 1.4 per cent while repair and maintenance remained largely unchanged compared with the fourth quarter of 2010.

Introduction

This bulletin shows output in the construction industry for the fourth quarter of 2011. Figures are in constant (2005) prices and are seasonally adjusted, though further breakdowns can be found in the data tables. This publication focuses on the latest quarterly figures, but also includes the latest annual and monthly estimates as well as revisions to earlier periods in line with our revisions policy.

The overall estimate for construction output this quarter (constant prices, seasonally adjusted) is 0.5 per cent lower than for the previous quarter, driven by volume reductions in five out of the nine sectors. Of the sectors that have grown, there was a rise of 4.0 per cent in infrastructure output, which in Q4 2011 reached a new high.

Construction output for 2011 as a whole was 2.8 per cent higher than 2010, in part also because of increases in infrastructure. New public housing output has also increased, 2011 being its highest level since 1980.

Output in the construction industry

Construction Output

Source: Construction: Output & Employment - Office for National Statistics

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The total volume of construction output in Q4 2011 fell by 0.5 per cent compared with Q3 2011 but rose by 0.9 per cent compared with Q4 2010. The volume of output in 2011 was 2.8 per cent higher than in 2010.

Construction output (constant (2005) prices, seasonally adjusted)

Great Britain

Table source: Office for National Statistics

Table notes:

1. R - Revised since October 2011 publication

New housing

The volume of new private housing work in the fourth quarter of 2011 was 3.5 per cent lower compared with the previous quarter. New private housing output in the fourth quarter of 2011 was 1.1 per cent lower compared with the same quarter in 2010.

The volume of new work in the public housing sector in the fourth quarter of 2011 was 1.0 per cent lower than the previous quarter and 10.8 per cent lower compared with the same quarter in 2010.  Public new housing output in 2011 was at its highest level since 1980.

New Housing

Source: Construction: Output & Employment - Office for National Statistics

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New public and private infrastructure

The volume of new infrastructure output in the fourth quarter of 2011 was 4.0 per cent higher compared with the previous quarter and 23.5 per cent higher compared with the same quarter in 2010. Infrastructure output in Q4 2011 was the highest recorded since the construction output survey identified the sector in 1980 and 2011 as a whole was also a record year for infrastructure. This could include work on some well publicised large infrastructure projects such as Crossrail and improvements to the M1 motorway.

This output should not include much of the work associated with the forthcoming London Olympics, which should be largely classified to the new public non-housing (excluding infrastructure) sector.

New Public and Private Infrastructure

Source: Construction: Output & Employment - Office for National Statistics

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New public non-housing (excluding infrastructure)

The volume of new work in the public non-housing sector (excluding infrastructure) in the fourth quarter of 2011 was 7.3 per cent lower compared with the previous quarter and 15.5 per cent lower compared with the same quarter in 2010. Public non-housing output in 2011 fell by 6.3 per cent, after three years of strong growth.

New Public Non-Housing Excluding Infrastructure

Source: Construction: Output & Employment - Office for National Statistics

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New private non-housing (excluding infrastructure)

The volume of new construction work in the private industrial sector in the fourth quarter of 2011 was 0.7 per cent lower compared with the previous quarter and 1.4 per cent lower compared with the same period in 2010.

The volume of new private commercial output in the fourth quarter of 2011 was 2.1 per cent higher compared with the previous quarter and 4.5 per cent higher compared with the same quarter in 2010.

New Private Non-Housing Excluding Infrastructure

Source: Construction: Output & Employment - Office for National Statistics

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Housing repair and maintenance

The volume of housing repair and maintenance work (including improvement work) in the public sector in the fourth quarter of 2011 was 1.8 per cent higher compared with the previous quarter and 4.4 per cent lower compared with the same period in 2010.

Housing repair and maintenance work in the private sector in the fourth quarter of 2011 was 1.8 per cent higher compared with the previous quarter and 4.7 per cent lower compared with the same period in 2010.

Housing Repair and Maintenance

Source: Construction: Output & Employment - Office for National Statistics

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Non-housing repair and maintenance

The volume of repair and maintenance work in the non-housing sector in the fourth quarter of 2011 was 2.1 per cent lower compared with the previous quarter and 4.5 per cent higher compared with the same period in 2010.

Non-Housing Repair and Maintenance

Source: Construction: Output & Employment - Office for National Statistics

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Output in the construction industry for 2011

In 2011 as a whole, construction output is estimated to have been 2.8 per cent higher than in 2010. Within this, total new work output rose by 3.1 per cent, while repair and maintenance output was 2.3 per cent higher.

Within new work, the greatest increase was in infrastructure output which rose by 13.2 per cent. Private sector new housing output also increased, and at a much higher rate than public new housing (8.2 per cent, against 1.1 per cent). In contrast, there were falls in new public non-housing output which fell by 6.3 per cent (including items such as schools and hospitals) and in new private industrial output, which fell by 8.7 per cent. Private commercial output rose by 2.7 per cent.

Within repair and maintenance, a fall of 4.4 per cent in repair and maintenance in the public housing sector was more than offset by an increase of 6.3 per cent in non-housing. Repair and maintenance output in private sector housing was virtually unchanged.

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

Revisions to the output series for the last 12 months are due to revised and late responses from contributors, revisions to the output price indices used to deflate the current prices to constant (2005) prices and due to seasonal adjustment, as outlined in the table above. The reference "Revised since [date] publication" refers to revisions since the first occasion on which figures for that date were published.

Revisions Table

Great Britain

Table source: Office for National Statistics

Table notes:

1. * Revised since October 2011 publication

ONS has carried out further analysis of the estimation of non-responding businesses (imputation) and introduced an improvement to the methodology in September's release. The previous method used to estimate for the non-response of previously responding businesses was to calculate the mean value of the growths for similar businesses between the values reported in the given month and the previous month. To remove the effect of any very large or small values, the top 20% values and bottom 5% were removed before calculating the mean movement between periods. The resulting link factor was applied to businesses who had responded in the previous period, but not in the current period. In practice, when returns were received from businesses, it was found that the imputation method used was underestimating values. As a result, revisions tended to be in an upwards direction.

In order to mitigate this effect, a number of alternative methods were considered and the best performing method, based on the data received to date, was comparing the ratio of the means of each group of similar businesses without any trimming. The revised method was applied only within our standard revisions policy (i.e. new month + revised 12 months) so there is the possibility of a small discontinuity in the series between August and September 2010.

   
The survey design for the new monthly survey was introduced in January 2010. Since then, we have been able to build a profile of activity, providing us with more data to test the initial design. We will continue to monitor this revised imputation method and further improvements will be introduced if it is considered that they will further improve the accuracy of our estimates. 

Revisions have also been introduced in the private industrial series within the revisions period as a result of changes to the classification of businesses. As a result, care should be exercised when comparing any growths prior to September 2010 with growths after this period in the private industrial sector.

The figures for construction output are used in the calculation of GDP. The estimate of GDP growth (-0.2 per cent) for 2011 Q4 published on 25th January 2012 included an early estimate of construction output of -0.5 per cent growth in Q4, based on limited responses from businesses. Construction growth published today for 2011 Q4 has not been revised from this figure of -0.5 per cent so the contribution of this sector to GDP growth is unchanged from the GDP Preliminary estimate published on 25th January 2012.

Earlier quarterly growths have been revised slightly. Q1 2011 to Q2 2011 growth has been revised from 3.1 per cent to 2.8 per cent and Q4 2010 to Q1 2011 growth has been revised from -1.6 per cent to -1.7 per cent. These changes have minimal impact on GDP but will be incorporated in the Second estimate of GDP to be published on 24th February 2012.

Background notes

1. Changes to Construction Statistics

   In June 2009 ONS announced major changes to the arrangements for producing construction statistics and indicated that the changes would take effect from the beginning of 2010. From January 2010, a new Monthly Business Survey replaced the quarterly output surveys for construction, and a quarterly new orders survey replaced the previous monthly new orders survey.

   Statistical Bulletins for output will continue to be produced quarterly. Monthly estimates are also produced but cannot be seasonally adjusted until a significant amount of monthly data has been collected.

   Publication dates in 2011 for the new surveys have been placed on the forward release calendar.     

   An explanation of the changes introduced from 2010 and the impact this has had on the published series (114.6 Kb Pdf) .

2. Relevance to users

   The statistical bulletin brings together information on the output of the construction industry in Great Britain. It draws on data compiled from the Monthly Business Survey, 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 7.6 per cent, covers Sections 41, 42 and 43 of the Standard Industrial Classification 2007 (excluding section 41.1 (property developers)).

   Similar data for Northern Ireland is provided by the Northern Ireland Statistics and Research Agency.

   Information relating to employment in the construction industry is available in the Labour Market Statistics Statistical Bulletin.
   

3. Accuracy

   Revisions to previous periods: Figures for the recent months are provisional and subject to revision as later information becomes available.

4. Deflation and seasonal adjustment

   'Value' of construction output is also known as 'current price' or 'nominal price' construction output. 'Volume' of construction output is also known as 'constant price' construction output. A volume series aims to measure the level of construction output, adjusting for price inflation, allowing comparisons of activity to be made between periods. 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.
    
   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.

   The impact of extreme weather events, such as snow, is unpredictable as to when or if it occurs within the season. The industry suffered heavy snow in January and December during 2010. No specific allowance has been made to treat these events other than allowing standard seasonal adjustment methods to consider the seasonal effect.
   

5. Quality

   A report on basic quality information (response rates, standard errors etc.) is published quarterly, two months after the end of quarter months, in table 11 of the construction output spreadsheet.

   A Quality Report  for the construction output survey can be found on the National Statistics web site.

6. Publication timetable

   The content of the construction output monthly publication varies as shown in the table below:

   Period	What is published	Timing of publication
   End of quarter month (March, June, September and December	Statistical release plus excel  spreadsheet consisting of tables  1, 2, 3, 4, 7, 8 and 9	Second Friday, 2 months after the end of the reference month
   One month after the end of quarter month (April, July, October and January)	Output summary plus excel spreadsheet consisting of tables 1 to 10	Second Friday, 2 months after the end of the reference month
   Two months after the end of quarter month (May, August,  November and February)	Output summary plus excel spreadsheets consisting of tables 3, 4, 5, 6, 8, 9 and 11	Second Friday, 2 months after the end of the reference month

   Table 1	Volume of construction output in Great Britain: constant (2005) prices, seasonally adjusted index numbers - by sector
   Table 2	Volume of construction output in Great Britain: constant (2005) prices, seasonally adjusted - by sector
   Table 3	Volume of construction output in Great Britain: constant (2005) prices - by sector
   Table 4	Value of construction output in Great Britain: current prices - by sector
   Table 5	Value of new construction output in Great Britain: current prices - by type of work
   Table 6	Value of new construction output in Great Britain: current prices - by region
   Table 7	Volume of construction output in Great Britain: constant (2005) prices, seasonally adjusted growth rates - by sector
   Table 8	Volume of construction output in Great Britain: constant (2005) prices, non seasonally adjusted growth rates - by sector
   Table 9	Output price indices (2005 = 100)
   Table 10	Value of construction output in Great Britain: current prices - by size band
   Table 11	Basic quality report

7. Further information

   Spreadsheets containing the data published in this Statistical Bulletin, as well as further breakdowns and previous ONS releases can be found on the ONS website.

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

   Related releases on new orders for construction in Great Britain are published on the ONS website.

   The Construction Statistics Annual publication brings together a wide range of statistics that are currently available on the construction industry from a number of different sources. 

   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.

8. Following ONS

   Follow us on Twitter or join us at Facebook

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9. Publication policy

   Details of the policy governing the release of new data are available from the Media Relations Office.

   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.

   Results of the survey held in April 2011 regarding users' satisfaction and use of the construction output and new orders surveys can be found on the ONS website.

   The Consultative Committee on Construction Industry Statistics (CCCIS) is a forum that meets, usually twice a year, under the auspices of BIS. ONS is a member of this forum. Agenda and minutes of CCCIS meetings can be found on the BIS web site.

   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 website or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk.
   

10. 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

    These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

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