- This is the first monthly construction output release to include Value Added Tax (VAT) data from 87,000 businesses on top of the 8,000 in the Monthly Business Survey.
- Construction output contracted for the sixth consecutive period in the three-month on three-month time series, falling by 2% in November 2017; this represents the largest fall since August 2012.
- There were three-month on three-month decreases in both all new work, and repair and maintenance, which fell by 2.1% and 1.7% respectively, although private housing new work did grow by 1.2%.
- Despite the overall three-month on three-month fall, construction output increased by 0.4% month-on-month in November 2017.
- The month-on-month increase in construction output occurred as a result of a 0.5% rise in repair and maintenance, and a 0.4% increase in all new work.
The monthly business survey, Construction output, collects output by sector from businesses in the construction industry within Great Britain. Output is defined as the amount chargeable to customers for building and civil engineering work done in the relevant period excluding VAT and payments to sub-contractors.
The survey’s results are used to produce seasonally adjusted monthly, quarterly and annual estimates of output in the construction industry at current price and at chained volume measures (removing the effect of inflation). The estimates are widely used by private and public sector institutions, particularly by the Bank of England and Her Majesty’s Treasury, to assist in informed decision-making and policy-making. Construction output is an important economic indicator and is also therefore used in the compilation of the output measure of gross domestic product.
Summary information can be found in the Summary Construction Output Quality and Methodology information.
This November 2017 release contains revisions for January 2016 onwards. This means that we have incorporated additional data since this period.
Revisions can be made for a variety of reasons, the most common include:
- late responses to surveys and administrative sources, or changes to original returns
- forecasts being replaced by actual data
- revisions to seasonal adjustment factors, which are re-estimated every month and reviewed annually
For the first time, administrative Value Added Tax (VAT) turnover has been used to estimate the output of small businesses, an important step in the transformation of the data sources used in economic statistics. In this release VAT turnover has been used for selected industries previously covered by the Monthly Business Survey from Quarter 1 (Jan to Mar) 2016 to Quarter 2 (Apr to June) 2017. Further information on the use of VAT turnover and its impact can be found in the VAT turnover implementation into national accounts article and information on the revisions to construction output following the incorporation of VAT turnover can be found in section 6 of this bulletin.
On 11 December 2014, the UK Statistics Authority announced its decision to suspend the designation of Construction Output and New Orders as National Statistics due to concerns about the quality of the Construction Price and Cost Indices used to remove the effects of inflation from the statistics.
We took responsibility for the publication of the Construction Price and Cost indices from the then Department for Business, Innovation and Skills (BIS) on 1 April 2015, introducing an interim solution for measuring output prices in June 2015 for all periods from January 2014 onwards.
The impact of improvements to construction statistics article explains and highlights the impact of recent improvements to construction statistics, affecting the nominal data series, output price indices and seasonal adjustment. As a result, the output price indices are no longer considered to be an interim method.
The Office for Statistics Regulation is currently in the process for re-assessing the National Statistic status for construction statistics: Output, New orders and Price Indices.Back to table of contents
Construction output decreased by 2% in the three-month on three-month series in November 2017, representing the sixth consecutive period of decline in this series and the biggest contraction since August 2012. The three-month time series provides a more comprehensive picture of the underlying trends within the industry, compared with the more volatile monthly series, which is also shown in Figure 1.
Despite continuing to fall in the three-month on three-month time series, construction output grew month-on-month, increasing by 0.4% in November 2017. Figure 1 shows that construction output still remains at a relatively high level. Construction output peaked in March 2017, reaching a level that was 31% higher than the lowest point of the last five years, January 2013. Following the month-on-month increase in November 2017, construction output is now 27.6% above this level.Back to table of contents
Construction output can be broken down by different types of work; these are categorised into all new work, and repair and maintenance, as shown in Figure 2.
Figure 2 shows that since the beginning of 2015, new work, and repair and maintenance have followed a broadly similar pattern. Both repair and maintenance, and new work have risen steadily, resulting in all work reaching a level peak in January 2017.
The 0.4% month-on-month rise in construction output in November 2017 occurred due to increases in both repair and maintenance, and all new work. Total repair and maintenance increased by 0.5%, following three consecutive months of decline. Elsewhere, all new work grew marginally, expanding by 0.4% in November 2017. It is worth noting that all new work accounts for approximately two-thirds of all work, while repair and maintenance accounts for approximately one-third.
Figure 3 shows the difference in three-month on three-month volume from the different sectors in terms of real value growth, taken from our seasonally adjusted chained volume measure series.
Construction output fell by £779 million in the three-month on three-month time series. This fall has been broadly driven by decreases in private commercial work, infrastructure and total housing repair and maintenance. Private commercial work decreased by £401 million in November 2017. Meanwhile, both total housing repair and maintenance, and infrastructure continued their recent declines, falling by £164 million and £157 million respectively.
The majority of other sectors were broadly flat in November 2017, with only private housing providing a positive contribution to growth, increasing by £100 million; representing the fifth consecutive period of growth in this sector.
Figure 4 shows the difference in month-on-month volume from the different sectors in terms of real volume growth, taken from our seasonally adjusted chained volume measure series.
Construction output in November 2017 increased by £55 million compared with October 2017. This increase has been driven primarily by an increase in the value of new housing work, with private housing increasing by £111 million and public housing increasing by £13 million. The only other notable increase came from total housing repair and maintenance, which increased by £18 million in November 2017.
The only negative contributions to growth came from infrastructure and private industrial work. Infrastructure fell for the third consecutive month, decreasing by £66 million. Meanwhile private industrial work fell sharply following growth in October 2017, contracting by £36 million.Back to table of contents
Table 1 provides a detailed description of the growth rates of each work type, alongside the seasonally adjusted chained volume measure level of output.
Table 1: Construction output main figures: November 2017, Great Britain
|Seasonally adjusted, volume £ million and percentage change|
|Volume £ million||Most recent month on the previous month||Most recent month on year||Most recent three-months on three months earlier||Most recent three months on year|
|Total all work||12,811||0.4||0.4||-2.0||1.6|
|Total all new work||8,229||0.4||0.0||-2.1||1.3|
|Total repair and maintenance||4,582||0.5||1.2||-1.7||2.1|
|Other new work|
|Repair and maintenance|
|Source: Office for National Statistics|
Download this table.xls
Total all work increased to £12,811 million in November 2017. This rise stems from increases in both total all new work, which grew to £8,229 million and total repair and maintenance, which increased to £4,582 million.
Compared with November 2016, construction output also grew 0.4%. This month-on-year increase was driven by a 1.2% rise in total repair and maintenance, stemming from 4.1% growth in private housing repair and maintenance. In contrast, month-on-year growth in all new work was flat. The continued growth in both public and private new housing work was offset by falls in all other types of new work, including infrastructure and private commercial work, which fell 4.1% and 2.2% respectively.
Positive growth is also evident in the three-months on year time series, with the 1.6% growth in all work occurring as a result of sustained growth in all new work, and repair and maintenance. The 1.3% increase in all new work was driven primarily by growth in private housing, which grew 6.7%. The 2.1% increase in total repair and maintenance occurred as a result of private housing repair and maintenance expanding by 5.6% compared with the previous three-months a year ago.Back to table of contents
The earliest period open for revision in this release was January 2016; revisions to Construction output data up to Quarter 3 (July to Sept) 2017 are consistent with Quarterly national accounts: July to September 2017, published on 22 December 2017.
Quarterly national accounts: July to September 2017 was the first release to use Value Added Tax (VAT) data for periods January 2016 to June 2017. This has been used alongside the Monthly Business Survey data in the production of gross domestic product (GDP). Further information on the use of VAT data was published on 22 December 2017 in an article, VAT turnover implementation into UK National Accounts: December 2017 update, including an impact analysis on the changes only caused by VAT data. The incorporation into Construction output uses the VAT data from 87,000 businesses.
Figure 5 shows the index volume series for all construction work, comparing the series to the version previously published in Construction output in Great Britain: October 2017 and new orders July to September 2017. In addition to the implementation of VAT data, revisions have occurred due to other reasons, including the processing of late survey responses and re-estimated seasonal adjustment factors.
The annual growth rate for 2016 has been revised from 3.8% to 3.9%. There were downward revisions to the first two quarters of 2016, followed by upward revisions to all subsequent quarters.
The largest revision to the month-on-month growth rates was in October 2016, which has been revised from negative 0.4% to positive 0.5%. This has contributed to a revision of the Quarter 4 (Oct to Dec) 2016 growth rate from 2.2% to 3.2%. This revision has been caused by both Monthly Business Survey revisions and the implementation of VAT data, with the largest contribution coming from new housing work.
There has been a revision of 0.6 percentage points to the month-on-month growth rate for October 2017, from negative 1.7% to negative 1.1%. These revisions are only due to Monthly Business Survey data, with the largest increase in private housing new work, which has been revised from negative 2.7% to positive 0.7%.
Links to related statistics
Output in the construction industry follows the Eurostat Short Term Statistics (STS) regulation for production in construction. Before any comparisons are made with the Euro area or EU28, it is worth noting that the UK is the only member state to follow the A method for compiling production in construction statistics.
The latest release of Production in Construction (PDF, 519KB) published by Eurostat on 19 December 2017 for October 2017, showed the seasonally adjusted production in the construction sector decreased by 0.4% in the Euro area (EA19) and decreased by 0.7% in the EU28 when compared with September 2017. It should be noted that an accurate comparison cannot be made, as Eurostat data are calculated on a 2010 equals 100 basis, while Great Britain data are calculated on a 2015 equals 100 basis.
Outside the EU, the US Census Bureau release Value of construction put in place (PDF, 229KB) was published on 3 January 2018. This includes the total dollar value of construction work done in the US.
The Construction Statistics: Number 18, 2017 edition was published on 2 October 2017. This publication contains analysis on the construction sector in 2016, as well as information on sources and outputs in the industry.
Other useful links
- Department for Communities and Local Government (Housing starts and completions)
- Construction statistics in Northern Ireland
Our Monthly Construction Output Survey measures output from the construction industry in Great Britain. It samples 8,000 businesses, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving a questionnaire by post every month.
The Construction Quality and Methodology Information report contains important information on:
- the strengths and limitations of the data and how it compares with related data
- uses and users
- how the output was created
- the quality of the output including the accuracy of the data
Contact details for this Statistical bulletin
Telephone: +44 (0)1633 456344