Output continues to rise in UK construction

By Sarah Ann McCay16 June 2014

Construction output continues to rise in the UK, according to the Office for National Statistics (ONS) latest report ‘Output in the Construction Industry, April 2014 and New Orders Q1 2014’.

According to the ONS, construction output in April 2014 rose by 1.2% (£113 million, €140 million) when compared with March 2014. There was a slight rise of 0.9% (£55 million, €70 million) in new work and a larger increase of 1.6% (£57 million, €71.5 million) in repair and maintenance.

Year-on-year figures also show growth. Compared with April 2013, construction output increased by 4.6%, all new work increased by 4.9% due to strong increases in new housing and private industrial work. Repair and maintenance increased by 4.2% over the same period.

The construction sector’s contribution to GDP has also been revised upwards. An estimate of GDP for Q1 2014 published on 22 May 2014 included an estimate of construction growth of 0.6%. However, late survey data for March 2014 has pushed this figure to 1.5% of GDP.

Steve McGuckin, UK managing director of construction consultancy Turner & Townsend, said, "With such a big upward revision to the construction sector's contribution to GDP growth, the industry can hold its head high.

"Its power to generate jobs and broader economic progress is undimmed, and construction growth has finally spread from the southeast to many other parts of the UK.

"But the long lag time between an investment decision being made and shovels in the ground means these output figures don't yet fully represent the strong levels of activity at the front end of the industry.”

While work continues on current projects construction new orders in Q1 2014 were estimated to be 6.3% lower than Q4. There were falls in orders for public new housing (-45.7%), infrastructure (-16.5%), private industrial (-14.6%) and private commercial work (-1.9%). On a positive, public other new work grew up 6.8% and private housing orders were up 2.8%.

"Infrastructure remains a serious worry though. Despite a tiny rise in April, this sector's output has slid 7.6% since the same time last year. While industrial sector work is showing some very encouraging signs, the construction industry as a whole is still heavily reliant on house building,” added McGuckin.

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