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UPDATE 1-UK Q3 construction output up 4 pct qq, Q2 revised down

LONDON, Nov 12 (Reuters) - British construction output rose 4.0 percent in the third quarter, but lower output in the second quarter could lead to a downward revision of overall economic growth in that period, official data showed. Friday's figures for July to September from the Office for National Statistics confirmed data published in a first reading of third-quarter GDP published last month. However, the ONS said construction output between April and June increased by only 6.8 percent, rather than the 9.6 percent previously estimated. "Given today's revised figures for construction output in Q2, ONS assesses that GDP growth in Q2 would be 0.2 percentage points lower," it said. That would take Q2 growth down to 1.0 percent, although the ONS said the extent of the revision would depend on whether there were any adjustments to other components of GDP. Construction contributed around a quarter of the surprisingly robust 0.8 percent growth recorded between July and September and around half of the 1.2 percent annual growth in the second quarter, although it makes up only around 6 percent of economic output. However, the construction sector's strong contribution to UK growth is likely to fade quickly due to deep government spending cuts over the coming years. "The construction growth we saw in the second quarter was so big that people aren't surprised to see a downward revision," said David Page, a strategist at Lloyds Corporate Markets. He added that lower Q2 GDP growth would imply that growth was not slowing so fast in the second half of the year. A breakdown of Friday's figures showed public and private infrastructure output was 1 percent down on the quarter, although it was 23 percent up on the year. Public housing construction output rose 7 percent on the quarter and 48 percent on the year, taking it to its highest level since 1980. Total construction output in Q3 was 8.6 percent higher on the year, below the 11 percent annual rise estimated in the Q3 GDP release. (Reporting by Fiona Shaikh) Keywords: BRITAIN CONSTRUCTION/ (Reuters Messaging:fiona.shaikh.reuters.com@reuters.net; Tel. +44 207 542 2774) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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