Output increase gives industry ‘much-needed boost’

Clement weather helped the construction industry to grow in May, reversing a three-month decline.

Construction output jumped by 1.9 per cent, outpacing growth of 0.4 per cent across the whole UK economy, according to the Office for National Statistics (ONS).

Output still slowed overall by 0.7 per cent in the three months to the end of May, reflecting dips of 1.1 per cent in April and 0.4 per cent in March. However, activity was up slightly on a year ago, growing by 0.8 per cent across the period.

Anecdotal evidence from ONS surveys suggested warmer weather contributed to the uptick, as the Met Office reported the warmest May on record. Previous months saw heavy rainfall scupper productivity.

Eight out of nine sectors tracked by the ONS reported growth. The housing sector led the charge, with a 7 per cent increase in new public housing and a 2.1 per cent boost to private housing. Infrastructure output also picked up, growing by 3.5 per cent.

Scott Motley, head of programme, project and cost management at Aecom, said the output increase would give the construction sector a “much-needed boost”.

He said: “Confidence will also be buoyed following the general election result and the clarity and stability that Labour’s parliamentary majority provides for the nation’s future direction.

“Ambitious manifesto pledges combined with action in the first few days of the administration suggest infrastructure will be a clear priority.”

Fraser Johns, finance director at Beard Construction, agreed that the sector should be encouraged by the data.

He said: “With the election now settled, the hope is we can all pick back up and continue to build momentum during the second half of the year.

“As we see borrowing conditions improve, with a potential base rate cut in the near future, this will certainly enable more clients to push ahead with plans.”

Clive Docwra, managing director of property and construction at consultancy McBains, warned that it is not yet clear whether the upturn indicates a recovery.

He said: “Despite these returns, the sector still needs a shot in the arm, and developers will hope Labour’s announcement this week to get the country building translates into renewed confidence from investors, both in housing and commercial projects.

“Every sector within the industry will also be crossing their fingers for a period of economic stability to help construction across the board get back on track.”

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