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Mon September 21 2020

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July output up 2.6% on the year

12 Sep 14 Construction industry output grew in July 2014 by 2.6% year-on-year but saw no change compared with the previous month’s output.

Latest data from the Office for National Statistics show that there were variations by type of work, when compared with June 2014 output. There were month-on-month increases in infrastructure (3.3%), private commercial (1.0%) and total housing (0.8%). This was largely offset by a decrease in non-housing repair and maintenance (4.1%). Despite this decrease, the June 2014 non-housing repair and maintenance figure was estimated to be at its highest level since the monthly series began in January 2010.

The 2.6% year-on-year growth in July 2014 was the 14th consecutive month of year-on-year output growth. However, this growth was the weakest since November 2013 (1.5%).

New orders for construction in the second quarter of 2014 are estimated to be 3.8% higher than in Q1. There were increases in infrastructure (20.8%), private commercial (9.6%), public new housing (7.3%), and public other new work (0.3%). Private new housing and private industrial fell by 6.3% and 1.9% respectively.

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Despite these falls the levels of these series were still higher than at the downturn in this series which began in Q1 2009.

Commenting on the figures, EC Harris head of strategic research Simon Rawlinson said: “Monthly output data for July is steady – suggesting that overall volumes for work for the year will be 4-5% up on 2014, in line with forecasts. The headline figures for new orders are more encouraging showing that orders in Q2 2014 are 3.8% on the quarter, albeit down by 5.3% on the year.  The commercial sector has seen healthy growth of 10% after a period of 18 months of steady volumes, and infrastructure has bounced back by 20% after a particularly weak 1st quarter.  The weakest sector is housing, down from levels last seen in 2007 by 6% to just over £3bn.   The recovery in the commercial market has been evident in the increased intensity of procurement activity, particularly in London.  The slight slowdown in housing, which is concentrated in the east and southeast, is unlikely to free-up capacity as the commercial sector steps up a gear.”

He added: “Regional differences in the data are quite striking with high rates of growth evident in the northwest, Yorkshire & Humberside, Wales and Scotland, which has seen particularly strong growth in infrastructure and public sector spending.  Could a feel good factor in the building trade have any impact on next week’s referendum?  Who can tell, but with long term work in the bag, the signs are that Scottish contractors will enjoy a busy 2015, whatever the outcome.”

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