-Tim Moore, Markit's senior economist
The UK construction sector's activity slowed at the end of the last year, due to less maintenance and repair work as well as slower house building. Total construction output sank by 2.1% compared with the previous quarter, a bigger drop than the estimated earlier 1.8% fall, the Office for National Statistics reported. The volume of new home construction, the main driver behind higher construction output earlier in the year, decreased by 0.2% after jumping 6.1% in the September quarter of 2014, its first drop since the beginning of 2013. For December alone, total construction output ticked up by just 0.4% after falling by 1.8% in November, considerably less than an expected 2.8% month-on-month growth. For 2014 as a whole, output increased 7.4%, the fastest growth since 2010, but momentum is fading and output in December alone was only 5.5% higher compared with the same period last year.
However, the ONS said that the downward revision of construction output, which makes up 6% of the British economy, should not have a real, one decimal, effect on the first estimate of the UK GDP data, which so far stands at 0.5%. The second estimate, which will include expenditure data, is due to be published later in February. Low inflation and stronger consumer spending are expected to add more strength to the second estimate.
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