Construction industry showing signs of improvement
The construction industry has picked up after months of showing stagnant growth and falling output, the ONS Construction Output figures have shown.
Construction output increased by 0.6% in Q3, partially reversing the drop of 1.2% in Q2.
This was driven by a 1.4% rise in new work.
Within the new work output, private housing rose by £156m (1.8%) while public housing was the only sector that declined, falling by £72m.
Gareth Belsham, director of the national property consultancy and surveyors Naismiths, said: “Construction has emerged as the economy’s ‘come-back kid’.
“After months of flat or falling output, the sector came out swinging in the third quarter.
“While the huge size of Britain’s service sector means it must take the bulk of the credit for dragging the economy back to growth, construction deserves plaudits for pulling off the most Houdini-like turnaround.
“Activity is growing strongly, and the growth is refreshingly broad-based – with new infrastructure, commercial and residential building all up.
“The reversal of fortune is no overnight miracle. Brexit fears still stalk investors’ calculations, even if concerns have been soothed somewhat by the growing sense that a chaotic ‘no-deal’ exit is becoming less likely.
“Instead what we’re seeing is a gradual uncorking of some of the demand which has been repressed for months or even years.
“There is only so long that mothballed projects can be delayed, and while conditions are far from perfect, a steady stream of tactical investors is now sensing that opportunities can now outweigh the risks.
“This is no opening of the floodgates, but they are ajar – and deals are beginning to flow once again.”
In contrast, repair and maintenance output declined by £114m, driven by a £150m fall in private housing repair and maintenance.
Neil Knight, business development director, Spicerhaart Part-Exchange & Assisted Move, added: “These numbers suggest it’s very much ‘steady as she goes’ in the new housing sector.
“The month-to-month figures are more or less flat from August to September, but looking at the quarterly data the picture is one of solid growth: new private housing is up 1.8% in Q3 compared to Q2, and 2.3% on Q3 last year.
“That’s not going to set the world on fire but in the context of considerable uncertainty in the market and in the wider economy, it’s a stable foundation on which to build and means we can look forward to the new year with a sense of guarded optimism.
“It’s been a successful 2019 for Spicerhaart Part-Exchange & Assisted Move, and there’s no reason to suppose that can’t be repeated in 2020.”