Construction Turning A Corner

Date Published 20 September 2013

Data released by the Office for National Statistics has provided more encouraging news on the UK economy.

Real output in Great Britain's construction sector grew by 2.0% compared with the same month a year ago, due to a 5.8% increase in new work. The expansion in new work was partially offset by a 3.6% decline in repair & maintenance activity.

Scott Corfe, Managing Economist, Centre for Economics and Business Research, said: 'The construction sector has fared poorly since the start of the financial crisis, with economic output in 2012 some 13.7% lower than in 2007.

'The latest labour market data show the number of workforce jobs in the sector in June 2013 was 11.6% lower than in June 2007 - 256,000 fewer jobs. Given this weak recent performance, the latest data from the ONS are welcome and suggest that the sector may be turning a corner.
Looking at new work in the construction sector, output growth was strongest for private housing, where construction activity in July 2013 was 14.7% higher than a year ago.

'This suggests that the recovery in the housing market seen in recent months, supported by schemes such as Help to Buy and Funding for Lending, is starting to translate into a recovery in house building.

'Overall, the latest official data on construction are encouraging and we expect the sector to start making a more positive contribution to economic growth over the coming months. Unofficial measures of construction sector activity, such as the Markit/CIPS Purchasing Managers' Index (PMI) for the sector, suggest that economic expansion continued in August.