Friday, May 11, 2012
Construction down further
Posted by David Smith at 12:00 PM
Category: Thoughts and responses

Because of the quality and volatility of the data, the Office for National Statistics had to make heroic assumptions even to limit the fall in construction output in the Q1 gross domestic product figures to 3%. Now it has more data, the fall is 4.8% and the effect will be to knock a further 0.1 points of growth in GDP in Q1, so that the initial 0.2% fall is likely to be revised to 0.3%.

It might not, if the service sector is found to have done better than its initially estimated 0.1% rise. Ultimately, the 4.8% drop in construction will also be revisited, though not for a while. A similar fall a year ago was mainly revised away. For the moment, however, we are stuck in the position of weak official data further undermining confidence.

Meanwhile, manufacturers achieved some margin growth. The drop in output price inflation last month from 3.7% to 3.3% was less than expected. Input prices were up by only 1.2% on a year earlier.