The latest figures published today by the Office for National Statistics (ONS) show that construction output increased by 1.2% in April 2014 compared with March 2014.
Falls in construction output in February and March 2014 have resulted in the rolling three month growth rate falling by a modest 0.1%. However, compared with April 2013 construction output increased by 4.6% due to strong growth in new house building but the quarterly level is still 10.3% below its peak in 2008 Q1.
April’s construction data points towards a strengthening housing market and a pickup in commercial activity seen in private industrial and commercial building. These movements are supported in Bank of England reports which found an increase in housing market transactions, strong growth in house building and a gradual return of confidence in the commercial construction sector.
These improvements coincide with growth in mortgages for house buyers and rising house prices. The Bank of England has reported an increase in mortgage lending in every quarter since Q1 2012, while the ONS House Price Index has risen in every month since March 2012.
ONS say that while the underlying trend in new housing orders has been one of growth, the quarter on quarter fall of 9.0% in Q1 2014 misleadingly suggests that this trend has come to an end. Splitting the sector into public and private new housing orders shows that this fall is due to a significant fall in public housing new orders of -45.7%.
In April 2014, repair & maintenance work increased by 1.6% compared with March, up 4.2% on April last year. Housing repair and maintenance grew slightly due to an increase in public housing repair and maintenance. Non-housing repair and maintenance increased by 2.8%.
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