UK output up in July

By Sandy Guthrie16 September 2013

July’s volume of construction output in the UK rose by more than 2% over the previous month, largely as a result of an increase in new work and a small rise in repair and maintenance.

Figures from the UK’s Office for National Statistics (ONS) estimated that the July monthly construction output increase of 2.2% included a rise in new work of 3.2% coupled with a small rise of 0.6% in repair and maintenance.

It said that when comparing July 2013 with July 2012, construction output had increased by 2.0% thanks to a 5.8% increase in new work. This rise in new work was in contrast to the estimated 3.6% fall in repair and maintenance during the same period.

Comparing the May-to-July period with the same three months of 2012, construction output increased by 0.8%. It grew by 2.0% when compared to the February-to-April 2013 period.

In the second quarter of 2013, the volume of new orders was estimated to be 19.8% higher than the first quarter of this year. The 2013 second quarter estimate showed a 32.8% rise compared with 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 the third quarter of 2010, and its highest volume since the fourth quarter of 2007.

ONS statistics now combine the output in the construction industry and new orders.

Dr Noble Francis, economics director at the UK’s Construction Products Association, said that although construction output grew in the second quarter of 2013, this was purely driven by housing, which in turn had been boosted considerably by the government’s Help to Buy scheme.

“However,” he said, “the latest figures on new orders show that the £111 billion construction industry is ready to enjoy a sustained recovery over the next two years.

“Overall, there are strong positive signs of a sustained recovery in construction output, not just in housing but also in private and public construction sectors.”

He said the Construction Products Association forecast that construction output would grow 12.2% by 2016 as these new orders fed through into activity on the ground providing an additional £11.8 billion for the industry and the wider economy.”

'Back to health'

Steve McGuckin, UK managing director of the global construction and project management consultancy Turner & Townsend, was bullish about the figures, saying, “The construction industry is running, not walking, back to health.

"There is always a lag between wider economic growth and a surge in construction, and this recovery is no different. Construction is back, with pressure already growing on its supply capacity.”

He said, "Output is creeping up, but the pipeline is racing ahead – in the second quarter it jumped nearly a third on the same time last year.

“While the industry is now more upbeat than it has been for a few years, the best players are facing a new challenge – how to respond to rising demand.”

He added, “The construction sector has seen two false dawns already in its slow recovery. The momentum and hugely improved sentiment suggest that we are not about to witness a third.”

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