UK construction output returns to growth in June

British construction output returned to moderate growth in June, recovering from a slowdown seen in April and May, official data showed on Friday.

For the second quarter as a whole, the Office for National Statistics said output was up by 0.2 percent from the first quarter, compared with an estimate of unchanged output which it had used to calculate gross domestic product last month.

The ONS said this small upward revision to construction did not point to any material revision to its preliminary estimate of 0.7 percent GDP growth in the second quarter of 2015.

In June alone, construction output rose 0.9 percent on the month, below economists' forecasts of a 2.2 percent pick-up. But falls in output in April and May were revised to be smaller than previously stated, with output falling 1.0 percent in May compared with an earlier estimate of a 1.3 percent fall.

On the year, output in June was 2.6 percent higher, below economists' forecasts of a 3.3 percent rise but still the fastest growth since March.

However, looking at the second quarter as a whole, annual output growth was the slowest in two years and just 2.4 percent higher than in the second quarter of 2014.

Construction makes up 6 percent of Britain's economy, but the data is volatile, especially on a monthly basis, and can contribute to significant revisions to overall GDP.

Construction fell sharply after the financial crisis and was slow to recover. It gained pace early last year but then weakened towards the end of 2014, as a temporary slowdown in the housing market reduced the construction of new homes.

Mark Robinson, chief executive of Scape Group said: “Today’s data shows a 0.9% rise in construction sector output in June, reversing the trend of the last few months, which is great news for the construction industry. After a slow start to the year and uncertainty around the general election, the market is feeling more confident and the industry is starting to bounce back. Output in June 2015 was also 2.6% higher than the same time last year – mirroring the growth in the wider economy.

“Of particular interest in today’s figures is the strong showing of the public sector, which has outperformed the rest of the industry. Public sector infrastructure output is up an impressive 21.8% on June last year, while other public sector construction work is up 3.5% on last month and 1.2% on Q1 2015. Public sector investment in new infrastructure and buildings is clearly driving construction growth and helping to boost the economy.

“Looking ahead, all eyes will be on the government’s November Spending Review and we hope to see the government’s commitment to investment in infrastructure continue.”

Friday's data suggested this trend may be coming to an end, with private-sector home-building up 3.9 percent on the quarter, the biggest rise since the third quarter of 2014.

Overall levels of home-building in Britain remain well below the levels needed to meet demand, the Royal Institution of Chartered Surveyors said on Thursday as it forecast further rises in house prices.

Your News

If you've got a story that would be of interest to Builder & Engineer readers, send us an email


2017-05-31 13:33

The rate of Insurance Premium Tax (IPT) will rise by two per cent on June 1 to 12 per cent on all non-exempt transactions. Martin Bennison, managing director at construction finance firm Ultimate Finance, explains what this means for UK construction companies.

2017-05-25 08:41

Building Information Modelling (BIM) is growing in popularity and is now mandatory for centrally funded public-sector projects. Experts and the curious are gathering more and more frequently at dedicated congresses, exhibitions and workshops. Many people are now asking: Where does the UK stand on the issue of BIM and the digitisation of the construction industry?

2017-05-10 10:47

Opening site doors to more females is vital to plugging the construction skills gap, reports Claire Cameron

THE construction industry continues to be plagued by a well-documented skills gap with some suggesting the shortage could get worse before it gets better.

2017-05-08 14:27

If you work on a building site, are self-employed or have a zero-hours contract, you might be surprised to know you work in the ”gig economy”. This is the economy characterised by temporary work and irregular hours, pay and working conditions.

2017-03-29 10:31

Jeremy Gould, VP sales Europe, TomTom Telematics, discusses how technological developments in vehicle telematics have opened up new workflow management possibilities for the construction industry

2017-03-21 09:31

With the demand of oil increasing, it’s estimated that the Earth will reach its full capacity for oil consumption at some point within the next 20 years. This is despite the production of oil decreasing, and the construction industry is no exception to this, reports Niftylift.

2017-03-17 10:55

With construction firms leading the way in drone technology, Claire Cameron takes a closer look at how unmanned aerial vehicles (UAVs) can be used onsite

2017-03-07 16:20

While the physical safety of workers is prioritised on construction sites, mental health is often overlooked, reports Claire Cameron

Free E-newsletter Sign-Up

Sign up for our free e-newsletter

Looking for a company or service?