Construction recovery ahead

Published:  27 September, 2013

There has been a dramatic increase in construction new orders during the second quarter of 2013, according to recent data from the Office for National Statistics.

Dr Noble Francis, economics director at the Construction Products Association, said: “Although construction output grew in the second quarter of 2013, this was purely driven by housing, which in turn has been boosted considerably by Help to Buy. However, the latest figures on new orders show that the £111bn construction industry is ready to enjoy a sustained recovery over the next two years.

“A rise in housebuilding has been augmented by increases in major infrastructure and a return to growth in school and hospital construction. Infrastructure new orders in the four quarters to Q2 were 19.8% higher than a year earlier and new orders for public non-housing, which primarily covers schools and hospitals, grew 12.6% over the same period.

“New orders in private commercial, the largest construction sector worth £21bn each year, fell 4.9% in the four quarters to Q2. However, new orders in the second quarter were higher than in the previous quarter and appear to have passed the nadir, suggesting growth in private commercial medium-term.

“Overall, there are strong positive signs of a sustained recovery in construction output, not just in housing but also in private and public construction sectors. Our forecasts anticipate that construction output will grow 12.2% by 2016 as these new orders feed through into activity on the ground, providing an additional £11.8bn for the industry and the wider economy.”

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