Construction economy grows 2.3%

Construction output in the second quarter grew 2.3% on the first three months, the first rise since autumn last year.

Official government figures show that output grew most quickly for new work, by 3.1%, with repair and maintenance broadly stable. The higher than expected growth is above early estimates used to judge the total economy’s second quarter growth, meaning the 0.2% GDP growth should be revised upwards by 0.1%.

Construction output was also up on last year, showing a 0.8 rise on the second quarter of 2010. The growth follows two quarters of decline output, and output is still almost 10% below the pre-recession peak of quarterly output recorded at the start of 2008.

The fastest quarterly growth was recorded in public and private infrastructure, which jumped 6.2% in the quarter. The only sector to record a fall in output was housing repair and maintenance, based mainly on a decline in private spending.

The Office of National Statistics at the same time published revised back data for construction output, following a review of its methodology after criticism of figures not representing the real industry picture. These showed that the growth report in 2010 was actually much stronger than initially thought, and that the decline in output at the start of this year actually less pronounced.

CECA director of external affairs Alasdair Reisner said the figures were very welcome news. He said: “However, it is important to remember that while these figures are excellent news, the infrastructure sector has largely outperformed the industry through the downturn because of government-funded projects. With further cuts still to feed through in many areas, and confidence among private investors still sorely lacking in the broader economy, it would be foolhardy in the extreme to think the worst is over.”

The statistics are available here.