RICS cautious on UK recovery
By Helen Wright16 November 2010
UK construction output rose +4% in the third quarter to £ 25,8 billion (€ 30,4 billion), but obstacles to growth remain and there are "good reasons for maintaining a degree of caution".
This was the message from Simon Rubinsohn, chief economist at the UK Royal Institution of Chartered Surveyors (RICS), reacting to the latest statistics on construction output from independent UK body, The Office of National Statistics (ONS).
Mr Rubinsohn noted that the third quarter increase in construction output followed a +7% jump in the second quarter, making the output for the sector now less than 8% away from the peak output of approximately £ 28 billion (€ 33 billion) recorded in early 2008.
"The breakdown of the data shows the recovery has been broadly based with both the private and public sector enjoying a pick-up in output. Significantly, much more of the increase has come through in new work rather than repair and maintenance," Mr Rubinsohn said.
According to the ONS figures, new work in the third quarter rose by +4,8% and repair and maintenance rose by +2,4% against the second quarter, while the year-on-year changes stood at +8,6% and -9,6% respectively.
But Mr Rubinsohn warned that a cautious approach was needed towards how well the industry would fare over the coming year.
"The public sector has been benefiting from the acceleration of some capital spending programmes during the dying days of the last government but with cuts set to bite, this boost to demand is inevitably set to wane," he said.
"Anecdotal evidence continues to indicate that finance for development remains in short supply," he explained, concluding that this obstacle to growth was "unlikely to ease in the near term".