UK construction output dips 1 per cent in July
Major driver of unexpected decline is 2.5pc decline in amount of new homes being built
British construction output unexpectedly dipped in July, reversing a bounce seen in June, after the biggest annual fall in house-building in more than two years, according to official data.
Construction output fell 1 per cent on the month, bucking economists' forecasts of a 0.5 per cent pickup after an unrevised 0.9 per cent rise in June.
Compared with a year earlier, output fell 0.7 per cent, again disappointing economists' forecasts of a 0.6 per cent rise.
A driver of the decline was a year-on-year fall in the amount of new housing being built, which dropped by 2.5 per cent, the first decline since March 2013.
Construction of public housing fell a hefty 15.6 per cent, while the 0.8 per cent growth in private construction was the slowest since March 2013 as well.
Construction fell sharply after the financial crisis and was slow to recover, but gained pace last year before easing earlier this year.
On Thursday, the Royal Institution of Chartered Surveyors pointed to a lack of housing as driving the biggest price rises in over a year. It estimates overall property prices will rise 6 per cent in Britain this year.
Construction makes up 6 per cent of Britain's economy, but the data is volatile, especially on a monthly basis, and can contribute to significant revisions to overall gross domestic product.
However, the Office for National Statistics did not revise the 0.2 per cent growth rate it recorded for the sector in the second quarter, saying it would wait until more comprehensive annual statistical revisions are made to official data later this month.
Separately, the office said that it did not expect these revisions to annual rates of GDP growth to differ much from provisional estimates it made on August 5.
These had pointed towards upward revisions for growth in 2011, 2012 and 2013.