Statistical Bulletin

Construction Output, July and New Orders, Q2 2013

Coverage: GB Date: 13 September 2013 Geographical Area: Region Theme: Business and Energy Theme: Economy

Key Points
In line with the announcement made on 24 June 2013 this statistical bulletin now combines the Output in the Construction Industry and New Orders in the Construction Industry statistical releases. ONS estimates that in July 2013 the volume of monthly construction output increased by 2.2% when compared with June 2013 (see figure 1). This increase was predominantly due to a rise in new work of 3.2% coupled with a small rise of 0.6% in repair and maintenance. When comparing July 2013 with July 2012 construction output has increased by 2.0% (see figure 1) due to a 5.8% increase in new work. This rise in new work is in contrast to the estimated 3.6% fall in repair & maintenance during the same period. Comparing the three months, May to July, with the same three months 12 months ago, the output of construction has increased by 0.8%. Construction output grew by 2.0% when compared with the previous three months (February to April 2013). In Q2 2013 the volume of new orders is estimated to be 19.8% higher than Q1 2013 (see figure 3). The Q2 2013 estimate shows a 32.8% rise compared with Q2 2012. There were large rises in construction orders for new housing where both public and private new housing showed strong growths enabling all new housing to record its largest growth (19.4%) since Q3 2010 and its highest volume since Q4 2007.

Introduction
Construction output estimates are a short term indicator of construction output by the private sector and public corporations within Great Britain (GB). The estimates are produced and published at

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

current prices (including inflationary price effects) and at chained volume estimates (with inflationary effects removed) both seasonally adjusted and non-seasonally adjusted. New orders in the construction industry estimates are a short term indicator of construction contracts for new construction work awarded to main contractors by clients in both the public and private sectors within the UK. The estimates are produced and published both seasonally and nonseasonally adjusted at current prices (including inflationary price effects) and at constant prices (with inflationary effects removed). Detailed estimates of construction output at current, chained volume measure and constant prices for seasonally and non-seasonally adjusted estimates are available to download in the Output in the Construction Industry, July 2013. Detailed estimates at current and constant prices both seasonally and non-seasonally adjusted of New Orders are available to download in the New Orders in the Construction Industry, Q2 2013. The output figures contained within this release are estimates produced from a monthly survey of 8,000 businesses in Great Britain. Further details on the newly published monthly seasonally adjusted series and the chained volume measures can be found in the Whats new section of the output background notes. The Definitions and explanations section in the background notes of this bulletin includes additional information on items contained in this release.

Economic Context
Construction output is a major component in the production approach to measuring gross domestic product (GDP), accounting for 6.3% of total GDP, based on 2011 prices. Due to the high value of construction in GDP and its stand alone status as a key economic indicator, the construction estimate is widely used by economists and industry specialists as an aid to economic interpretation and forecasting. According to the second estimate of gross domestic product (GDP), the UK economy grew by an upwardly revised 0.7% in Q2 2013, following an increase of 0.3% in the previous quarter. Construction output has been more volatile than these recent movements, rising by 1.9% in Q2 2013 after a decline of 1.4% in Q1 2013. Construction estimates can be highly responsive to the economic cycle and have provided some of the largest downward contributions to GDP, despite only accounting for 6.3% of the economy. Output in the construction sector grew steadily (with the exception of a mild downturn in 2004) from 2000 until early 2008, when a financial market shock affected the UK and global economic growth. The deterioration in economic conditions that followed had a marked effect on the three main sectors of the economy, and in particular construction. Between Q1 2008 and Q2 2009, construction output fell by 17.1%, while output in the production and services sectors fell by 5.4% and 11.7% respectively.

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

Quarterly estimates for Q2 2013 show that output in the construction sector remains 14.7% below its pre-downturn peak in Q1 2008, while output is 13.4% lower in the production sector and 0.2% lower in the services sector. Therefore, the construction sector lost output at the fastest rate in 2008/09 and subsequent growth has been the most subdued.

Output in the Construction Industry, July 2013

Figure 1: Construction Output monthly time series, Chained volume measures, Nonseasonally adjusted (NSA) and Seasonally adjusted (SA), million

Source: Construction: Output & Employment - Office for National Statistics

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

Download chart XLS format (32.5 Kb) Comparing July 2013 with June 2013, the volume of construction output has risen by 2.2% and is also 2.0% higher than July 2012. The month on month data show rises in both new work and repair and maintenance despite a fall in both measures of public sector expenditure on housing construction. The volume of public sector new housing construction is estimated to be down 6.5% compared with June while public sector repair & maintenance of housing is down 2.2% during the same period. Figure 2: Construction Output, quarterly time series, Chained volume measures, Nonseasonally adjusted (NSA) and Seasonally adjusted (SA), million

Source: Construction: Output & Employment - Office for National Statistics Download chart XLS format (21 Kb)

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

Comparing the three months May to July with the previous three months February to April, the volume of construction output is estimated to have increased by 2.0%. There were increases in both new work and repair and maintenance of 3.2% and 0.3% respectively. The 3.2% three monthly increase in new work included rises in all components with the exception of private industrial which fell 8.4%. There was growth in the construction of new housing with both public and private sector housing increasing during the period. Private sector new housing increased by 7.8% three months on three months while the volume of public sector housing increased by 7.0% during the same period. However, the latest monthly growth for public new housing is estimated to have fallen by 6.5%, in contrast to the 1.4% monthly growth in private new housing construction. The volume of repair and maintenance is estimated to have risen by 0.3% during the three months May to July and by 0.6% when comparing July with June. The 0.3% three monthly rise is despite an 8.4% fall in the volume of public housing repair and maintenance, which fell 10.8% when compared with the corresponding three months of 2012.

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

Table 1: Construction summary tables, Chained volume measures, Seasonally adjusted Table 1: Construction Percentage change million

Most recent Most recent Most recent Most recent Most recent quarter quarter on month on month level on a year a quarter the same on the earlier earlier month a previous year ago month Total All Work Total All New Work Total Repairs and Maintenance 0.8 2.3 -1.5 2.0 3.2 0.3 2.0 5.8 -3.6 2.2 3.2 0.6 9,343 5,810 3,533

Table 1a: All New Work Total All New Work New Housing Public Corporations Private Sector Other New Work 6.5 Infrastructure Excl Infrastructure Public Corporations Private Sector -6.0 4.1 -3.7 2.5 830 1.3 8.1 4.4 1,094 10.2 11.5 7.0 7.8 3.3 14.7 -6.5 1.4 362 1,441 2.3 3.2 5.8 3.2 5,810

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

Table 1: Construction

Percentage change

million

Most recent Most recent Most recent Most recent Most recent quarter quarter on month on month level on a year a quarter the same on the earlier earlier month a previous year ago month Private Sector Industrial Private Sector Commercial -11.7 -8.4 -13.9 0.8 249

-1.7

1.5

6.6

6.8

1,835

Table 1b: Repairs and Maintenance Total Repairs and Maintenance Housing Public corporations Private sector NonHousing -10.8 0.0 0.6 -8.4 3.9 0.9 -15.6 -1.0 -1.1 -2.2 2.8 -0.1 531 1,189 1,816 -1.5 0.3 -3.6 0.6 3,535

Table source: Office for National Statistics

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

Orders for New Construction, Q2 2013

Figure 3: New Orders, Constant (2005) index prices, seasonally adjusted

Source: Barbour ABI Download chart XLS format (21.5 Kb) It is estimated that the seasonally adjusted volume of all new orders rose between Q1 and Q2 2013 by 19.8%, up 2.1 billion to 12.9 billion, its highest level since the first quarter of 2010. The large rise was dominated by the 75.4% increase in infrastructure which accounted for 1.2 billion (75.2%) of the 2.1 billion increase in new orders. Evidence collected shows that there were a high number of electricity projects in Q2 led by new orders for wind turbines and solar farms. There were also large rises in construction orders for new housing where both public and private new housing showed strong growth enabling all new housing to record its largest growth (19.4%) since Q3 2010. The only sector to show a decrease on the quarter was public other new work which fell 5.2% to 2.1 billion. Comparing the quarterly data with the corresponding period 12 months ago, there were large rises in all components. There was particularly high growth in new housing where public new housing rose by 77.5% and private new housing by 44.8% contributing to a 32.8% growth in new orders over the period. New orders for housing are at the highest level seen since Q4 2007.

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

Table 2: Value of New Orders summary tables, Quarterly constant (2005) prices, seasonally adjusted Percentage change Most recent quarter on a year earlier Percentage change Most recent quarter on the previous quarter million Most recent level

1. All New Work

All New Work All New Housing All Other Work

32.8 51.5 25.8

19.8 19.4 19.9

12,886 4,017 8,869

1.1 New Housing

All New Housing Public Private

51.5 77.5 44.8

19.4 31.3 16.1

4,017 969 3,048

1.2 Other New Work

All Other Work Infrastructure Excl Infrastructure Public Private - Industrial Private - Commercial

25.8 47.2 11.7 24.8 21.1

19.9 75.4 -5.2 20.9 9.5

8,869 2,747 2,078 654 3,390

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

Table source: Barbour ABI

Download table XLS format (32.5 Kb) Users should note that these New Orders statistics use data from Barbour ABI and are thus produced using different methods from those in place at the time when the statistics were first assessed for compliance with the Code of Practice for Official Statistics. They are currently being reassessed as part of an ongoing assessment of ONS's short-term economic output indicators, with a view to confirming their designation as National Statistics. Further details on the collaboration between the ONS and Barbour ABI can be found in the background notes section of this bulletin.

Construction Estimates in Gross Domestic Product

Construction estimates are a key component of the production approach to measuring GDP along with the estimates of services, production and agriculture. As an aid to users, the short term releases that directly feed into the production approach to measuring GDP now include an additional table of GDP components. It is anticipated that this table will inform users of the relationship between the individual components which comprise GDP output. The publication dates and the quarterly growths of the individual GDP components are shown in figure 4 below. Table 3 shows the month 1 (July) output figures that will feed into GDP for Q3 2013, along with the revised estimates for Q1 and Q2.

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

Table 3: GDP Quarter 2 2013 Component tables, chained volume measure, seasonally adjusted Percentage Change Publication % of GDP Release date Month of GDP Most recent quarter on a year earlier 1.5 0.3 : -0.7 -2.6 : 0.4 -5.3 : 2.1 1.3 : 1.8 0.3 -4.9 Most recent quarter on a quarter earlier 0.7 0.2 : 0.7 0.2 : 1.9 -1.3 : 0.6 0.5 : 0.9 0.6 1.7 Most Most recent recent month month on the on the same previous month a month year ago : : -1.6 : : -1.3 : : : : : 3.0 : : : : : 0.0 : : 2.2 : : : : : 1.1 : : :

GDP

100

23 Aug 27 Jun 06 Sep

Q2 Q1

July Q2 Q1 July Q2 Q1 July Q2 Q1 July Q2 Q1 Q2

Index of 15.2 Production

06 Aug 09 May 13 Sep

Construction 6.3 output

09 Aug 10 May 27 Sep

Index of Services

77.8

23 Aug 23 May 15 Aug

Retail Sales Agriculture 0.7

18 Jul 18 Apr 23 Aug

Table source: Office for National Statistics Table notes: 1. Second estimate of GDP

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

Figure 4: GDP components, Chained volume measures, seasonally adjusted index

Source: Construction: Output & Employment - Office for National Statistics Download chart XLS format (30 Kb) Figure 4 shows GDP and its components from Q1 2005. While it is apparent that all the components were severely affected by the economic downturn from 2008 it is clear that the downturn had a more pronounced effect on both production and construction. Production and construction have in fact gone through a second dip. The production dip began in Q4 2010 and output fell to levels lower than those seen through the downturn, while construction fell slightly later, beginning its decline in Q2 2011 and is now at levels originally seen in 2009. Production has, however, shown two consecutive periods of growth up to Q2 2013, the first time this has occurred since Q3 2010, while construction, which is more volatile due to the effect of external factors such as weather, has shown only one quarter of growth into Q2 2013.

Background notes
1. Whats new

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

This statistical bulletin is the first to be produced combining both the Output in the Construction Industry and New Orders in the Construction Industry estimates. Future publications in the release following the quarterly release will continue to adopt this format. New Orders in the Construction Industry estimates have been compiled using data supplied by Barbour ABI. These data have also been used in the compilation of tables 5 and 6 in the Output of the Construction Industry data tables. Full details of this change in data source can be found in the document Announcement of Changes to New Orders in the Construction Industry. In response to user feedback and in line with the announcement made in the article Improvements to the methods used to compile Output in the Construction Industry statistics, this statistical bulletin now contains monthly seasonally adjusted chained volume estimates. Due to the potential for confusion when comparing constant price (volume) and chained volume measures, all references to constant price series have been removed from this, and future bulletins. The constant price series have also been removed from the associated time series dataset, although retained in a set of supplementary tables. It should be noted that due to seasonal adjustment taking place on a short span of data points used to interpret the seasonal effects (43 months), there is potential for increased revisions until the seasonal pattern is established within the time series. Users should note that a monthly seasonally adjusted chained volume series is not available pre-2010. This is due to monthly data not being available for this period. These data are a requirement for creating previous years prices from which chain linked volume measures are created. 2. About this release Construction output estimates are a short term indicator of construction output while new orders in the construction industry estimates are a short term indicator of construction contracts for new construction work awarded to main contractors by clients. Both these estimates are by private sector and public corporations within GB. Output estimates are produced and published at current prices (including inflationary price effects) and at chained volume estimates (with inflationary effects removed) both seasonally adjusted and non-seasonally adjusted. Chained volume measures are also described as volume. Construction output is used in the compilation of the output approach to measuring gross domestic product (GDP). New orders data are produced and published both seasonally and non-seasonally adjusted at current prices (including inflationary price effects) and at constant prices (with inflationary effects removed). The data published in this release cover construction estimates for Great Britain. Construction output estimates for Northern Ireland can be obtained from the Central Survey Unit. 3. Changes to New Orders Construction Statistics New Orders in the Construction Industry estimates have been compiled using data supplied by Barbour ABI. These data have also been used in the compilation of tables 5 and 6 in the

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

Output in the Construction Industry data tables. Full details of this change in data source can be found in the document Announcement of Changes to New Orders in the Construction Industry. Statistical bulletins for new orders are produced quarterly and incorporated into the Output in the Construction Industry statistical release. Publication dates in 2013 have been placed on the forward release calendar. An article describing the improvements made to New Orders and Output in the construction industry was published (135.4 Kb Pdf) in ONSs Economic and Labour Market Review in March 2010. An explanation of the changes introduced in 2010 and the impact this has had on the published series is available (115.6 Kb Pdf). Standard revisions to the new orders series include late responses from respondents, revisions to the price indices used to deflate the current prices to constant (2005) prices and due to seasonal adjustment 4. Aligning the construction output revision period to National Accounts policy Construction output is a key component of the production approach to measuring gross domestic product (GDP) and, as such, should be subject to the same data policies that govern the accounts although historically it has not been. National accounts data are subject to a revision policy which determines the periods open for data revisions ensuring that revisions to individual estimates can be shown throughout the accounts. Other major short term indicators such as the Index of Production, UK Trade and the Index of Services already adhere to this policy. From this publication the construction output time series has assumed the same revision policy as the UK National Accounts. The UK National Accounts revisions policy (67.8 Kb Pdf) covers all published quarterly and annual series appearing in the National Accounts. The National Accounts represent a wide array of data on areas as diverse as production, trade, earnings, spending, investment in fixed and financial assets and balance sheets. The nature of the National Accounts is that in principle all the activity is linked, so that a change in one area will have an impact elsewhere and consequently making revisions to one part of the National Accounts may lead to revisions through the system. The main strength of the system is that it allows analysis of the various economic indicators both in isolation and in conjunction with others. The strength of the integrated National Accounts system however may mean less flexibility for taking on revisions to the National Accounts. The National Accounts revisions policy is designed to give users a clear understanding of which periods are open for revision at each data release and why incorporating revisions from a single source is not a simple matter. The current revision policy for construction output is to revise current price survey data for 13 months and seasonal factors for 5 quarters. While this is still applicable for processing the data

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

the revisions to the time series will not be available to users until the back periods are open for revisions within the National Accounts. 5. Statistical continuous improvement In December 2012, as part of its Statistical Continuous Improvement programme, ONS published a 'Review of Sample Design and Estimation Methodology for Construction Output'. This report evaluated the sample design and estimation methods used on the Construction Output Survey. The conclusions of the review were that the current sample is performing well and that the current methodology for estimation within the survey produces the smallest standard error. Use of the data Output in the Construction Industry estimates are widely used both internally and externally and have been identified by legal requirement and user engagement surveys. The key users of data from the Output of the Construction Industry dataset are: United Kingdom National Accounts. Eurostat, the statistical office of the European Union, in order to comply with statutory legislation on short-term business statistics (STS). Short-term business statistics provide information on the economic development of four major domains: industry, construction, retail trade and other services. Industry analysts requiring estimates of the construction industry output of Great Britain. Trade associations making UK and international comparisons and to forecast trends in the construction industry. Other government departments including; the Department for Business, Innovation and Skills (BIS), HM Treasury (HMT) and the Department for Communities and Local Government (DCLG).

6.

As well as being a key indicator of the performance of construction companies, the results of the survey also contribute to the estimate of the gross domestic product of the UK, contributing approximately 6.3% of GDP. 7. Methods The ONS Monthly Construction Output Survey measures output from the construction industry in Great Britain. It samples 8,000 businesses, with all businesses employing over 100 people or with an annual turnover of more than 60m receiving a questionnaire by post every month. The results of the survey are deflated using price indices from the Building Cost Information Service (BCIS) of the Royal Institute of Chartered Surveyors (RICS) and then seasonally adjusted using X-12 Arima to derive the published estimates. Since the 1950s New Orders in Construction data have been collected from a sample survey of businesses; originally monthly and now quarterly. There are some known quality issues with the existing survey data as (a) the coverage of the survey is unknown; and (b) new orders allocated to regions are not always accurately recorded. The New Orders data is now supplied under

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

contract to the ONS by Barbour ABI. Barbour ABI will provide ONS with improved coverage and regional splits of new orders in construction data. 8. Quality The latest Quality and Methodology report for the Output of the Construction Industry estimates can be found on the ONS website. Output Revisions In addition to 13 months of survey data revisions, a refinement to the seasonal pattern has caused slight revisions to the seasonally adjusted time series from Q1 2012. This publication shows data revisions from Q1 2012 in line with the national accounts revision policy explained previously. One indication of the reliability of the key indicators can be obtained by monitoring the size of revisions. Analysis of the previously published quarterly seasonally adjusted constant price series has shown that revisions to construction data are small. Generally these quarterly revisions are less than 1% when compared to the final revised period five quarters after initial publication. This indicates that the published estimates are a reliable snapshot of the output in the industry at the date of publication. Table 5 records the size and pattern of revisions which have occurred in the chained volume measures over the last two months. Please note that these indicators only report summary measures for revisions. The revised data may be subject to sampling or other sources of error. Details about this revisions material can be found in the document Revisions information in ONS First Release. Table 4: Growth revisions to previously published CVM output data New work published in this release Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 -6.4 -4.6 -2.8 3.2 -2.3 New work estimates previously published -6.3 -5.5 -2.5 2.7 -2.6 New work revisions

9.

-0.1 0.9 -0.3 0.5 0.3

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

R&M published in this release Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 -0.1 -2.3 -0.6 -0.2 0.2

R&M estimates previously published -0.1 -2.8 -0.8 0.2 -0.6

R&M revisions

0.0 0.5 0.2 -0.4 0.8

Total output published in this release Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
Table source: Office for National Statistics

Total Output estimates previously published -4.0 -4.5 -1.8 1.7 -1.8

Total output revisions

-4.1 -3.8 -1.9 1.8 -1.3

-0.1 0.7 -0.1 0.1 0.5

Download table XLS format (29.5 Kb) 10. Relevant links International Comparisons International construction comparisons are compiled by Eurostat. The estimates produced in this bulletin are included in these comparisons. Further information can be found on the Eurostat web page. 11. Further information Releases on construction output and employment prior to the transfer to ONS can be found on the BIS website. 12. User Engagement

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

The user engagement section of the ONS website contains results of the survey held in April 2011 regarding users' satisfaction and use of the new orders and construction output surveys. 13. New Orders Revisions This publication includes no raw data revisions due to the transition to the new data source. However, a refinement to the seasonal pattern and updated price indices has caused slight revisions to the data from Q1 2012. One indication of the reliability of the key indicators can be obtained by monitoring the size of revisions. The tables below record the size and pattern of revisions which have occurred over the last five quarters. Please note that these indicators only report summary measures for revisions. The revised data may be subject to sampling or other sources of error. Details about this revisions material can be found in the document Revisions information in ONS First Release. Table 5: Growth revisions to previously published KP new orders data All New Work All New Work published in this release (%) 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1
Table source: Office for National Statistics

All New Work estimates previously published (%) 10.0 -8.6 9.7 10.5 -10.0

All New Work revisions (%)

11.0 -11.1 12.4 9.8 -10.1

1.0 -2.5 2.7 -0.7 -0.1

Download table XLS format (28 Kb) Quarter 2 2013 data are now compiled from data supplied by Barbour ABI therefore there are no revisions to the survey data previously published. Revisions to the volume data are due to price indices revisions and adjustments to the seasonal pattern. 14. Understanding the data Interpreting the data

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

When making comparisons it is recommended that users focus on chained volume measures or constant price (volume), seasonally adjusted estimates as these show underlying movements rather than seasonal movements. Construction output estimates are subject to revision because of: Late responses to the Construction Output Survey. Revisions to seasonally adjusted factors which are re-estimated every quarter. Annual updating of the Inter-Departmental Business Register (IDBR) that forms the basis of the sampling for the Construction Output Survey. This occurs in January and can have an effect on the results published in May.

Definitions and explanations Definitions of terminology found within the main statistical bulletin are detailed below: Output Output is defined as the amount chargeable to customers for building and civil engineering work done in the relevant period excluding VAT. As well as work charged to customers, businesses are asked to include the value of work done on their own initiative on buildings such as dwellings or offices for eventual sale or lease, and of work done by their own operatives on the construction and maintenance of their own premises. The value of goods made by businesses themselves and used in the work is also included. In all returns, work done by sub-contractors is excluded to avoid double counting, since sub-contractors are also sampled. Output does not include payments made to architects or consultants from other firms this would also cover engineers and surveyors. It would include wages paid to such people if they were directly employed by the business. In all returns, work done by sub-contractors is excluded to avoid double counting, since sub-contractors are also sampled. Output does not include payments made to architects or consultants from other firms this would also cover engineers and surveyors. It would include wages paid to such people if they were directly employed by the business. Current price (value) (CP) Current prices are the actual or estimated recorded monetary value over a defined period. They show the value for each item expressed in terms of the prices of that period. Constant price (volume) (KP) A constant price or volume measure is a series of economic data from successive years expressed in real terms by computing the production volume for each year in the prices of a reference year. The resultant time-series of production figures has the effects of price changes removed (that is, monetary inflation or deflation). In other words, from the raw data a series is obtained which reflects only production volume. See also deflation below. Constant price series in this bulletin are based on the reference year 2005.

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

Chained volume measures (CVM) A chained volume series is a series of data from successive years, put in constant price terms by computing the production volume for each year in the prices of the preceding year, and then chain-linking the data together to obtain a time-series of production figures from which the effects of price changes (i.e., monetary inflation or deflation) have been removed. Further information on chain-linking can be found in the methodological article Annual chain-linking (58 Kb Pdf). Seasonal adjustment (SA) Seasonal adjustment aids interpretation by removing effects associated with the time of the year or the arrangement of the calendar, which could obscure movements of interest. Deflation It is common for the value of a group of financial transactions to be measured in several time periods. The values measured will include both the change in the volume sold and the effect of the change of prices over that year. Deflation is the process whereby the effect of price change is removed from a set of values. The current reference year is 2010 for CVM data and 2005 for KP (volume) data. Sectors Institutional sectors are defined in the System of National Accounts (SNA) glossary as: Units that are grouped together to form institutional sectors on the basis of their principal functions, behaviour, and objectives. The resident institutional units that make up the total economy are grouped into five mutually exclusive sectors: Non-financial corporations. Financial corporations. General government. Non-profit institutions serving households. Households.

In the case of non-financial and financial sectors these can be further broken down into public sector, those units either controlled by the state or funded from the public purse and include general government, local authorities, housing associations and nationalised industries and private sector, those units controlled by private individuals or groups and not by the public sector. Gross domestic product (GDP) Gross domestic product (GDP) is an integral part of the UK national accounts and provides a measure of the total economic activity in a region.

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

GDP is often referred to as one of the main 'summary indicators' of economic activity and references to 'growth in the economy' are quoting the growth in GDP during the latest quarter. Construction estimates are a component of GDP from the output or production approach (GDP(O)) which measures the sum of the value added created through the production of goods and services within the economy (our production or output as an economy). This approach provides the first estimate of GDP and can be used to show how much different industries (for example, agriculture) contribute within the economy. Housing Housing is generally defined as all buildings that are constructed for residential use. Within the public sector this classification includes construction items such as local authority housing schemes, hostels (except youth hostels), married quarters for the services and police; old peoples' homes; orphanages and childrens remand homes; and the provision within housing sites of roads and services for gases, water, electricity, sewage and drainage. Private sector housing includes all privately owned buildings for residential use, such as houses, flats and maisonettes, bungalows, cottages, vicarages, and the provision of services to new developments. Private sector housing includes all privately owned buildings for residential use, such as houses, flats and maisonettes, bungalows, cottages, vicarages, and the provision of services to new developments. Infrastructure Infrastructure is the generic term for the basic physical and organizational structures and facilities needed for the operation of a society or enterprise. These construction items include buildings, roads, power supplies, etc. Other new work Other new work excludes the housing and infrastructure sectors. This classification includes construction items such as factories, warehouses, schools and offices, etc. Non-housing Within the public sector, non-housing is classified as the construction of building such as schools and colleges, hospitals, universities, fire stations, prisons and museums. Private sector non-housing is comprised of the private /industrial and private/commercial classifications. Private - industrial is the economic activity concerned with the processing of raw materials and manufacture of goods in factories and includes construction items such as factories and shipyards while private commercial includes all items not included in the previous categories such as embassies, theatres, retail units, warehouses and garages, etc. Repairs and maintenance

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

The repairs and maintenance heading in the construction estimates comprises of housing, infrastructure and other new work. This concerns work which is either repairing something that is broken, or maintaining it to an existing standard. For housing output this includes repairs, maintenance, improvements, house/flat conversions, extensions, alterations and redecoration etc on existing housing. For non-housing this includes repairs, maintenance, redecoration etc on existing buildings/structures, which are not housing, for examples schools, offices, roads, shops. Table 1 of this bulletin aggregates infrastructure and other new work into non-housing. 15. Code of Practice for Official Statistics National Statistics are produced to high professional standards which are set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs and are produced free from any political interference. 16. Publication policy Details of the policy governing the release of new data are available from the Media Relations Office. Also available is a list of the names of those given pre-publication access to the contents of this bulletin. 17. Accessing data The Output in the Construction Industry incorporating New Orders in the Construction Industry statistical bulletin and relevant time series datasets are available to download free from the Office for National Statistics website at 9.30 am on the day of publication. ONS allows a list of agreed officials to have access to data 24 hours before publication, which is available on the Construction release page. 18. Further information and user feedback As a user of our statistics, we would welcome feedback on this release, in particular on the content, format and structure. For further information about this release, or to send feedback on our publications, please contact us using the information below. 19. Contacts: Media contact: Tel Media Relations Office Emergency on-call +44 (0)845 6041858

+44 (0)7867 906553

Email press.office@ons.gsi.gov.uk Contact us: Tel +44 (0)845 601 3034 Email info@ons.gov.uk

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Construction Output, July and New Orders, Q2 2013 | 13 September 2013

Website ONS Website Twitter ONS Twitter 20. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

Copyright
Crown copyright 2013 You may use or re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk. This document is also available on our website at www.ons.gov.uk.

Statistical contacts
Name Stuart Deneen Phone Department Email +44 (0)1633 456344 Office for National construction.statistics@ons.gsi.gov.uk Statistics

Next Publication Date: 11 October 2013 Issuing Bodies: Barbour ABI Office for National Statistics Media Contact Details: Telephone: 0845 604 1858 (8.30am-5.30pm Weekdays) Emergency out of hours (limited service): 07867 906553 Email: media.relations@ons.gsi.gov.uk

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