Housing drives construction growth
Construction output rose in the fourth quarter of 2014 by 0.2 per cent on the same period in 2013, with housing activity responsible for the growth.The latest data from the Office for National Statistics (ONS) constitutes an upward revision of previous estimates, which originally forecast output of minus 0.3 per cent. This is due to later returns across all types of work being stronger than those used in the preliminary estimate of Gross Domestic Product.Compared with 2012, the output of the construction industry is estimated to have risen by 1.3 per cent (£1.49 billion). The housing sector accounts for almost the entirety of this growth - it has increased 10.4 per cent (£2.1 billion) year on year with a small growth contribution from non-housing repair and maintenance of 0.7 per cent.However, while the estimated annual volume of construction output in 2013 of £112.6 billion is 3.9 per cent greater than the level recorded during the economic downturn in 2009, it remains 12.2 per cent below its peak of £128.2 billion in 2007.In quarter one of 2013, construction output fell by one per cent. It rallied in subsequent months, however, resulting in three consecutive quarters of growth for the first time since Q3 2010.A significant difference exists between activity in the private and public sectors. Public spending across the three aggregates (new housing, other new work and housing repair and maintenance) fell by four per cent year on year, while private spending rose by 3.4 per cent (£1.85 billion).Rob Wood, chief UK economist at the German bank Berenberg, said: "With confidence in the economic recovery building, interest rates still low and house prices booming, 2014 should be another strong year for builders. Though the first quarter may well see sizeable disruption from the weather, output will bounce back when the weather improves as builders make up for lost time."
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