UK construction output fell further in September

Rabobank's Jane Foley: "Budget cuts in local government have lowered construction project funding"

UK construction activity fell 13.1% in September from a year ago, as the sector's downturn steepened, Office for National Statistics figures have shown.

The month saw further big drops in new building by the commercial and public sectors (excluding infrastructure projects), both of which were down by a fifth from a year ago.

House building saw a 5% bounce in the month but remains 12% below a year ago.

Separately, the UK's trade deficit narrowed in September to £2.7bn.

That compared with a £4.3bn deficit in August, and a £3.5bn deficit in September 2011, according to ONS data.

The UK saw improvement in goods exports, with stronger demand in non-EU countries, particularly the US, and chemicals manufacturers doing well.

Goods imports meanwhile saw their biggest monthly drop since December, led by a drop in fuel and manufactured goods imports.

The overall trade deficit in goods narrowed to £8.4bn from £10bn a month earlier, while the UK's trade surplus in services held steady at £5.7bn.

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