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Reality check for recent construction growth

Industry output fell back in May by 1.1% but remains around 3.5% higher than in May 2013, Month-on-month, May’s fall in construction output was caused mainly by private commercial work falling by 3.6%, and repair & maintenance dropping by 1.1%.

  • New housing output (which includes both public and private housing) increased for the third consecutive month, experiencing growth of 1.1% driven entirely by the public housing component.
  • Year-on-year growth continues.  While output has fluctuated from month to month, the industry has now seen year-on-year growth for 12 consecutive months and house-building remains the construction industry’s main driver.

Construction industry worryingly reliant on house building

Commenting on the data, Construction Consultants, Turner & Townsend’s UK managing director Steve McGuckin said: “The surprise reversal of April’s growth comes as a timely reality check for the construction industry. Order books and levels of confidence are both strong, but despite the great progress made in the past year, no-one should take the momentum for granted.

“Month-on-month figures are notoriously volatile and should be taken with a healthy pinch of salt; but the sustained fall in infrastructure output – down more than 8% in a year – cannot be explained away so easily.

“But while sectors other than residential are showing some encouraging signs, the construction industry as a whole is still worryingly reliant on housebuilding. That leaves it exposed to the impact of inevitable interest rate rises.  The construction industry is responding well to Britain’s urgent need for more homes, but its growth must become more broadly based if it is to ride out any bumps on the road ahead,” ended McGuckin.

Click here to read the full article in The Construction Index

Construction Equipment Hire reflects latest trends

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