ONS: UK construction output rises more than expected
Data from the Office for National Statistics (ONS) revealed that output rose 2.5 per cent month-on-month in April, beating analysts’ estimates for a 1.2 per cent increase and following a 3.6 per cent decline in March.
However, construction output fell on an annualised basis by 3.7 per cent in April - although it was better than the 4.9 per cent drop expected and the previous month’s 4.5 per cent slide.
The ONS said new orders for the construction industry in the first three months of 2016 were expected to have fallen 1.2 per cent compared to that previous quarter and the same period a year ago.
The second estimate of UK gross domestic product for the first quarter, released in May, estimated construction output fell 1.1 per cent during the period.
Cruden Building & Renewals told Scottish Construction Now it was encouraged by the industry growth.
Allan Callaghan, managing director, said: “These positive figures come at a time where the sector is traditionally at its most productive, with the longer, drier days supporting increased work on the ground. This, paired with demand for new housing and access to available finance has in no small part helped to create this statistical growth across Scotland.
“While last month’s ONS construction output figures illustrated a drop within the sector overall, housebuilding across the United Kingdom rose to meet this renewed demand for private and public properties and I would expect this to continue for the coming months.
“Housebuilding and the sector in general is a key part of Scotland’s economy and a vital driver for growth. The Scottish Government listened to voices from within the sector when it introduced the Help to Buy (Scotland) scheme and it is clear from these figures, allied with our experiences on the ground, that it is beginning to pay dividends as a new generation of Scots get their first foot on the property ladder.
“The Scottish construction sector has faced many challenges but those operating have the drive, desire and talent to face them head on. Now is the time for the housebuilding sector to make hay while the sun shines, driving future construction growth and ensuring we see positive statistics in the coming months.”
Professor Noble Francis, economics director at the Construction Products Association, said: “Today’s output figures are, of course, encouraging, but what is of greater interest are the ‘forward-looking’ new orders, which fell 1.2 per cent in Q1. This was likely led by a 17 per cent drop in the private housing sector for Q1 versus Q4, though orders in this sector remained up 18 per cent versus a year ago.
“Other data from across the sector show that private house building activity is already improving. Still more encouraging is that new orders in the infrastructure sector continue to go from strength-to-strength, up 27 per cent in Q1 versus Q4 and up 16 per cent versus a year ago. As we’ve highlighted in our own forecasts, this sector looks set to lead activity for the wider industry over near-term.
“The underlying fundamentals for the construction sector remain strong, so the modest fall in new orders may reflect a slight impact from uncertainty around the EU Referendum. We would also expect new orders in Q2 to suffer a greater impact from this same uncertainty; however, this could all be offset in the second half of the year once the vote is out of the way.”