Industry growth stalls in June

Construction output grew less than expected in the second quarter of 2011 because growth stalled in June, according to the Construction Products Association.

Office of National Statistics (ONS) figures showed the industry only grew 0.5% between April and June, lower than had been expected following provisional reports putting April and May’s output 8.4% above that for January and February.

Noble Francis, economics director at the CPA, said: “The indication we had from talking to people within the industry was June had a significant slowdown compared to earlier in the quarter.” He added that some of the decline in the official figures could be due to the monthly figures not being seasonally adjusted, but that most of the drop was from falls in activity.

“Some of it is a slight pull back in the public sector but also slower than expected recovery of the private sector,” he said. Public sector housing repair and maintenance, education and health work fared the worst in June, he added.

The small growth in the second quarter followed two successive quarters of contraction in the industry. The output for April to June 2011 was 1.4% down on the same months in 2010.
The figures come as a prediction from construction economist Hewes & Associates indicated that there would be three further years of recession in construction.

Martin Hewes, senior associate at Hewes & Associates, said that output in the construction industry would fall 5.3% in 2011, 7% in 2012, and 2% in 2013. Earlier this month data firm Experian predicted contraction in 2011 and 2012, but forecast growth in 2013.