UK: Upturn in construction sector boosts recovery hopes
- Credit: PA
Hopes for the UK recovery were given a boost today as official figures confirmed activity in the construction sector jumped in April and held firm in May amid a revival in building work.
New seasonally adjusted data from the Office for National Statistics (ONS) showed construction output leapt 4.6% higher month-on-month in April and remained flat in May.
The figures put the sector on track for growth of more than 2% for the second quarter, which is set to help the recovery in the wider economy gather pace.
Howard Archer, chief UK and European economist at IHS Global Insight, said: “It looks highly likely that construction output made a recently all-too rare positive contribution to gross domestic product growth (GDP) in the second quarter, thereby helping growth to strengthen and broaden from the first quarter when GDP rose 0.3%.”
He added: “Any positive contribution from the construction sector in the second quarter would feel like a bonus for the UK economy, given the sector’s prolonged struggle”.
You may also want to watch:
But the ONS figures suggest May was a trickier month for construction firms after the recent surge in housebuilding activity paused for breath, with private housing new work edging 0.5% lower month-on-month, although it remained 2.7% higher on a year earlier.
Housebuilders have enjoyed the benefits of the Government’s Help to Buy scheme launched in April, which has sent would-be buyers flocking to new developments.
- 1 First look at £10m Sudbury garden centre revamp
- 2 'I can't carry it' - Shock as plant starts growing eight inches a day
- 3 WATCH: 'Selfish' drug-driver ploughs into police detective's vehicle
- 4 QPR trigger buy-out clause to sign Dozzell for £1m
- 5 Gill has 'no regrets' over Norwich to Ipswich switch
- 6 'I'll always have love for Ipswich, but it was time to move on' - Dozzell signs for QPR
- 7 Mum of 'beautiful' Lily calls for young people to have their hearts tested
- 8 Tim Hortons restaurant in Ipswich given green light
- 9 If your surname is on this list you could be sitting on a fortune
- 10 Teenage county lines drug dealer handed suspended prison sentence
Despite the dip in May, housebuilders have continued to report surging interest from buyers as a result of Help to Buy, suggesting the housing market should see a sustained recovery over the months ahead.
The ONS also recently revealed UK factory production suffered in May, down by 0.8%, although overall industrial production remained flat in the month.
Experts predict buoyant conditions in the dominant services sector will see GDP growth pick-up to around 0.6% in the second quarter.
The International Monetary Fund (IMF) hiked its 2013 growth forecast earlier this week, pencilling in growth of 0.9% this year, up by 0.3% since its last report following mounting signs of economic cheer.