UK construction industry downturn not as bad as first feared

News Article - 27 May 2011
Category: Industry

Revised data from the Office for National Statistics (ONS) reveals the UK construction industry's economic downturn is not as bad as first feared.

The latest data shows output in the sector was down 4 per cent in Q1 2011 rather than the previously estimated 4.7 per cent.

Indeed the construction industry recently questioned the way in which the ONS collects its data.

The Construction Products Association (CPA) in particular has called for a revamp of the methodology of data sourcing, with the CPA chief executive Michael Ankers writing to Chancellor George Osborne this month to warn that inaccurate data had repercussions on policy making.

The revised data means that overall GDP growth in construction was almost 0.1 percentage points better than the 0.5 per cent growth rate originally stated.

However, Chris Williamson, chief economist at Markit, believes the official figures released by the ONS conflict with all other surveys carried out across the construction industry.

Mr Williamson suggested that despite depression in the housing and civil engineering sectors commercial activity was actually holding up.

The ONS responded to calls from the construction industry with a letter to the Financial Times this week stating: "The new surveys introduced last year were a major improvement on what went before.

"We will consider the need to make adjustments and improvements to the methodology, should this prove necessary."

Contractors, sub-contractors, civil engineers and companies alike are beginning to search for more efficient construction industry business systems to improve planning, estimations, cost allocation and billing.

There is a legitimate need for a centralised system that enables construction companies to access contract information to build stronger supplier and customer relationships in the current financial climate.

An integrated business system with construction-specific applications such as estimation and valuation software not only puts an end to re-keying but further centralises data from payments and remittances to management reports.

Article keywords: Office for National Statistics, ONS, construction industry, Construction Products Association, CPA, Michael Ankers, George Osborne, Chris Williamson, Markit, housing sector, civil engineering sector, construction industry business systems, integrated business system, estimation and valuation software

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