UK construction output fell sharply in January, dropping 7.9% compared with the same month last year, according to the Office for National Statistics (ONS). The figures underscore the sector's continued struggles amid a tough economic climate, dealing a blow to Labour's promises to boost housebuilding and infrastructure.
Construction accounts for just 7% of the UK economy, but its poor performance has been a drag on growth. Last year, the sector's weakness was blamed for pushing the economy back into recession. The three-month period from November to January showed an even steeper decline, with output down more than 10% year-on-year to £6.7bn.
The ONS data aligns with the Markit/CIPS construction purchasing managers' index, which has indicated contraction every month since October. Balfour Beatty, the UK's largest construction firm, reported a 7% fall in annual profits and warned of a 20% drop in UK revenues for 2013.
Chris Williamson, chief economist at Markit, noted that bad weather may have contributed to the weak figures but stressed the sector would continue to hinder economic growth. The ONS reported a 12.7% drop in new work volumes, driven by sharp declines in factories, warehouses, schools, and offices.
