UK: Upturn in construction sector boosts recovery hopes

Construction output leapt 4.6% month-on-month in April and remained flat in May, official data show

Construction output leapt 4.6% month-on-month in April and remained flat in May, official data showed today - 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.

Most Read

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.

Become a Supporter

This newspaper has been a central part of community life for many years. Our industry faces testing times, which is why we're asking for your support. Every contribution will help us continue to produce local journalism that makes a measurable difference to our community.

Become a Supporter
Comments powered by Disqus