Strong start to second quarter for the construction industry

According to a recent report the latest figures from the ONS show that the construction sector in the UK grew by 1.2% between March and April 2014.

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The figures have been compared with output levels from April last year and show an increase of 4.6%; it is therefore further evidence of the improving performance of the sector and its impact on wider economic growth.

It is clear that the housing sector is the main component of growth within the industry; private housing has increased by 2.5% between March and April 2014 and 16.6% from the corresponding month in 2013. At the same time public housing, which is down from March, was 26.3% higher than last year.

The private commercial sector fell by 0.9% between March and April; however it is 1.0% higher than April last year. Infrastructure has also increase by 0.6% month on month; however it is still 7.6% lower than April 2013.

These figures highlight that the growth patterns within the industry are reliant on housing and broader improvements are needed to ensure a robust recovery.

The ONS (Office for National Statistics) and Barbour ABI New Orders for the Q1 2014, showed that the total levels declined between Q4 2013 and Q1 2014 but were 7.6% higher than a year ago. The housing and industrial sectors both showed increases from last year but order levels in commercial and infrastructure were less than a year ago.

This data, combined with the latest ONS output figures provide further evidence of the focus on the residential sector in construction.

Construction ReviewAccording to Barbour ABI data on all contract activity, May witnessed an increase in construction levels with the value of new contracts awarded £5.3 billion, based on a three month rolling average.

This is as 5.3% increase from April but a 3.7& decrease on the value recorded in May 2013, an indication that the recent levels of growth in construction contract values is slowing. The number of construction projects within the UK in May increased by 0.6% on the previous month and is 9.6% higher than May 2013.

Majority of the construction projects awarded in May by values were in London, which accounted for 24% of the UK total, the main reasons being, the £300 million commercial development at Selfridges, Somerset Street Link and the contract for residential development known as The Hyde on Edgware Road, which was valued at £200 million. The next most prominent region was Scotland, accounting for 13% of the construction contract awarded in May.

References:

ONS

Barbour ABI

Economic & Construction Market review (June 2014)

 

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