The latest data released by the ONS shows that earlier predictions were a bit over-optimistic. Output prices were higher than had been forecast for last month, higher than the 0.7 percent predicted in March.
Unfortunately, the construction industry took a hard hit in the first quarter that was much worse than had been anticipated as it shrank almost 5% which is contract to the 3% that was originally calculated. This is reportedly due to a decline in infrastructure and construction in the public sector.
It is expected that the ONS will soon revise the report for the wider economy and deepen the slump the UK is in. Instead of the 0.2% decline that was originally stated, it now appears that the ONS will state that the actual figure stands at a decline in the economy of 0.3% for the first quarter.
Even though the building sector only accounts for less than 10% of the entire economy, 8% to be exact, it is the driving force behind the second recession in a row which resulted in the UK now being in a double dip recession.
Part of the gloom surrounding the construction industry is the fact that several large scale projects are about to come to an end. For one, the Olympics construction is almost at completion and this will bring a huge number of cuts to the public sector. This will have a significant impact on jobs as well as on the construction output.
Since the construction industry was the one solid sector last year, it had been hoped that it would keep driving the economy upwards but this has not been the case. Hopes for a speedy recovery are fading as the one last bastion of hope is seeing a decline and economists are predicting that the current recession will be harder to break out of than previously anticipated.
