European construction output in May was 6.7% down on previous year and only slightly better than April’s low figures.
Compared with May 2011, production in May 2012 dropped by 8.4% in the Eurozone and by 6.9% across all 27 countries of the EU.
Production in construction rose by 0.1% in Eurozone in May compared with April and by 1.6% across the whole of the EU. But the rise is on figures that had decreased by 3.7% and 6.9% respectively in April. Performance in the UK was up 6.3% on April.
The estimates were released by Eurostat, the statistical office of the European Union.
Among the member states with available for May 2012, production in construction rose in eight, fell in six and remained stable in the Czech Republic. The highest increases were registered in the United Kingdom (+6.3%), Romania (+5.0%) and Portugal (+3.6%), and the largest decreases in Slovenia (-17.5%), Hungary (-4.1%) and Spain (-3.3%).
Building construction dropped by 0.2% in the Euro area, but increased by 1.8% in the EU27, after -3.6% and -7.7% respectively in April 2012. Civil engineering rose by 0.6% in the Eurozone area and by 0.7% across the EU, after -3.9% and -4.8% respectively in the previous month.
In terms of the annual comparison, production in construction fell in 12 and rose in three. The largest decreases were registered in Spain (-24.8%), Slovenia (-23.7%) and Portugal (-16.4%), and the increases in Romania (+21.1%), Poland (+6.5%) and Germany (+2.2%). Building construction declined by 8.6% in the Euro area and by 6.3% across all 27 countries, after -5.9% and -5.1% respectively in April 2012. Civil engineering decreased by 9.3% in the Eurozone and by 10.9% across the EU, after -9.3% and -10.9% respectively in the previous month.
Source: The Construction Index
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A new report has warned that architects’ fees are unlikely to return to pre-recession levels over the next four years.
Business market research specialist MCI said that fees will slowly recover between now and 2016 but said it was unlikely they would get back to levels last seen in 2007.
It said that fees slipped 8% in 2008 before crashing 23% a year later when the recession began to bite.
It added: “Prior to the initial recession of 2008 the value of fees increased and growth was driven by a buoyant construction market with the need to increase housing supply resulting in strong output growth in the private and public housing sector.”
The report predicted only a modest recovery for private housing and said any upturn in private building would be slow and gradual with fears about the Eurozone hampering an upsurge in the commercial sector.
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Britain's economy slid into its second recession since the financial crisis after official data unexpectedly showed a fall in output in the first three months of 2012, piling pressure on Prime Minister David Cameron's embattled coalition government.
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The Office for National Statistics said Britain's gross domestic product fell 0.2 percent in the first quarter of 2012 after contracting by 0.3 percent at the end of 2011, confounding forecasts for 0.1 percent growth.
Most economists had expected Britain's $2.4 trillion economy to eke out modest growth in the early 2012, but these forecasts were upset by the biggest fall in construction output in three years coupled with anaemic service sector growth and a fall in industrial output.
Wednesday's figures will be a deep blow for Britain's Conservative / Liberal Democrat coalition, which has slid in opinion polls since a poorly received annual budget statement in March and risks embarrassment at local elections on May 3.
The government is also under pressure over revelations about its close relationship with media tycoon Rupert Murdoch.
The government desperately needs growth to achieve its overriding goal of eliminating Britain's large budget deficit over the next five years.
Britain's economy contracted by 7.1 percent during its 2008-2009 recession and recovery since has been slow, with headwinds from the euro zone debt crisis, government spending cuts, high inflation and a damaged banking sector.
Wednesday's data showed that output was still 4.3 percent below its peak in the first quarter of 2008, and the economy has only grown by 0.4 percent since the government came to power in the second quarter of 2010.
Output in Britain's service sector - which makes up more than three quarters of GDP - rose by just 0.1 percent in the first quarter after falling 0.1 percent in Q4 2011, kept down by a fall in output in the large business services and finance sector.
Industrial output was 0.4 percent lower, while construction - which accounts for less than 8 percent of GDP - contracted by 3.0 percent, the biggest fall since Q1 2009.
Britain's Office for Budget Responsibility forecasts growth of 0.8 percent this year.
Wednesday's data shows that first quarter output was no higher than a year earlier.
The Bank of England has warned that there is a risk of another contraction in the second quarter of 2012, due to an extra public holiday.
But unlike during the previous two quarters, it does not appear keen to provide further monetary stimulus through quantitative easing asset purchases, due to above-target inflation which looks stickier than before.
The BoE, and a number of private-sector economists, had argued before Wednesday that the underlying health of Britain's economy was stronger than ONS data suggested, due to relatively upbeat private-sector surveys and a fall in unemployment.
The ONS's preliminary estimates of GDP are the first released in the European Union, and are based partly on estimated data.
On average, they are revised by 0.1 percentage points up or down by the time a second revision is published two months later, but bigger moves are not uncommon.
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Latest figures from Office of National Statistics see output down 0.2%.
The construction industry is continuing to feel the squeeze after posting disappointing figures for Q3 output, according to the latest report from the Office of National Statistics (ONS).
Total volume of construction output was 0.2% lower than Q2, with all new work falling by 0.6% in Q3 compared to a 1.1% rise in the previous quarter.
The total volume of construction output in Q3 fell by 1% year-on-year with new work falling by 1.8% and maintenance rising by 0.9%.
Housing suffered the most dramatic falls, with new public housing dropping 8.2% compared to Q2 and a year-on-year fall of 8.9%.
The volume of new private housing work in the third quarter of 2011 fell by 2.5% compared to the previous quarter but was still 0.7% year-on-year.
New infrastructure output was 0.3% lower compared than the previous quarter but still 13.4% higher year-on-year.
Andrew Duncan, managing director of property at Turner & Townsend, said: “These figures are further evidence of the strength of the bad economic headwinds buffeting the construction sector.
“As the Eurozone debt crisis goes from bad to worse, a tidal wave of uncertainty is washing across the Channel, swamping any green shoots that may have sprouted in the second quarter.
“The omens for next year are not good, as the Eurozone saga shows little sign of abating, and the doubt it is sowing risks undermining the fragile progress made by the industry in 2011.”