GB output shows some growth

09 May 2014

Great Britain's construction output for March was estimated to be 1.0% lower than February, although the seasonally-adjusted estimate of construction output in the first quarter rose.

The March estimate from the Office for National Statistics (ONS) was £9.4 billion (€11.5 billion), while February’s was £9.5 billion (€11.6 billion). The ONS seasonally-adjusted estimate of construction output in the first quarter rose by 0.6% – £180 million (€220.3 million) – when compared with the fourth quarter of 2013.

The figures showed there were increases in both the new work, and repair and maintenance sub-sectors. New work increased by 0.9% – £160 million (€195.8 million) – with repair and maintenance rising by 0.2% – £20 million (€24.5 million).

The ONS said that when comparing the first quarter of 2014 with the same period in 2013, construction output had increased by 5.4% or £1.5 billion (€1.8 billion). Of this increase, £1 billion (€1.2 billion) was said to be attributable to new work, with the rest to repair and maintenance.

Output is defined by the ONS as the amount charged by construction companies to customers for the value of work produced during the reporting period, excluding VAT and payments to sub-contractors.

Compared to the previous month, construction output fell by 1.0% in March 2014 following a fall of 2.0% in February 2014. The ONS said the fall in construction output in March was broad based with all new work falling by 1.1%, and all repair and maintenance falling by 0.7%.

However, output over the quarter as a whole still rose by 0.6%, and on an annual basis growth was even stronger at 5.4%. It said the latest data highlighted a growing divergence in the performance of private new housing construction relative to total construction output. Despite accounting for only approximately 15% of total construction in 2013, new private housing rose by 23% on the year and has driven the recent recovery in total construction.

'Disappointment'

Steve McGuckin, UK managing director of the global construction consultancy Turner & Townsend, said, “March's slight month-on-month dip in output is a disappointment, but will do little to trouble sentiment in the industry in the south, which continues to go from strength to strength.”

He added, “While housebuilders led the charge last year, commercial property work has lagged badly in many parts of the country.

"But now industrial sector building is turning the corner too. Its output in the first quarter was 10% down on the same time last year, but it clocked up an impressive 6.5% month-on-month growth rate in March.”

He felt there were some encouraging signs at the national level. “But the industry still owes much of its growth to the current frenzy of housebuilding,” he said. “Such over-reliance on one sector is not ideal, but with signs that the growth is slowly becoming more broadly-based, the industry will be better placed to ride out any knocks that the inevitable rise in interest rates will bring."

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