Business

UK construction falls in April but new building rises

House construction Image copyright PA
Image caption Construction output did not fall as much as previously estimated, the ONS said.

Output in the construction industry fell 0.8% in April compared to the previous month, official figures show.

The fall reverses March's surprise 1.4% increase, the Office for National Statistics said.

But new housing projects contributed to a 1.6% increase in all new work during the month.

After revising its methodology for measuring construction, the ONS said output fell 0.2% in the first quarter, rather than 1.1% as previously thought.

This revision could have a theoretical impact on the UK's overall rate of economic growth, the ONS said.

It means the economy could have grown by 0.4% in the first quarter rather than 0.3% as previously forecast, and by 2.9% in 2014 rather than 2.8%.

The third and final revision of overall GDP for the first three months of this year will be published on 30 June. It is also possible that GDP for 2014 will be revised up at the same time.

The ONS said the upward revision incorporated late data and new seasonal adjustment parameters among other technical calculations.

Compared with a year earlier, construction output in April rose 1.5%, slowing from a rise of 5% in March.

Construction accounts for 6.4% of Britain's economic output, so its impact on overall GDP can often be negligible when compared with the services sector, which accounts for 77% of economic growth.

Even so, the slowdown in the economy economy in the first three months was seen in part as resulting from the weakness in the construction industry, which was linked to uncertainty ahead of the general election.

The latest set of figures fly in the face of that analysis, as much as they do the Bank of England's economic growth forecast last month, which cited a weaker outlook for housebuilding.

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