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Construction output rises 1.4% in Q2 as housing and infrastructure lead upturn

Construction output grew by 1.4 per cent in the last quarter, according to the latest figures from the Office for National Statistics.

Output was worth £27.2bn in Q2 2013, up slightly on Q1, but the figure was unsurprisingly down on Q2 2012, though only by 0.5 per cent.

Significant year-on-year growth came from both public and private housing, by 9.8 per cent and 8.2 per cent respectively, while infrastructure was 6.2 per cent up on 2012.

The quarterly growth for public housing was, at 12.8 per cent, stronger still, with output now at its highesst level since Q4 2011.

The commercial sector continued to struggle in the last quarter, being 8.2 per cent down on the previous year and worth £5.1bn, compared with a high of £8.4bn in Q1 2008.

Construction Products Association economics director Noble Francis said the figures were “pretty much what you’d expect”.

But he highlighted that the peak for total construction output is no longer Q1 2008. Instead, quarterly output peaked in Q1 2004 at £32.4bn.

The ONS has pointed out that the same revision occurred in last month’s figures, owing to a change in its methodology actioned last month, whereby the figures are indexed on 2010 prices rather than those for 2005.

“Construction output could potentially pick up in the second half of the year,” Dr Francis said.

“Public housing grew as well, and while infrastructure is flat on the quarter, some of the announcements from the 2012 autumn statement could take effect later this year.”

Turner & Townsend UK managing director Steve McGuckin said: “Housing was the star performer in Q2 – stoked in large part by the Help to Buy scheme unveiled in March.

“Some had questioned whether this would fire demand more than supply, but the data proves that Britain’s housebuilders have heeded the call for new homes, albeit not in the volumes we need.

“But performance in other sectors was more mixed: commercial property output was down both on the previous quarter and on this time last year.

“However, we are seeing increased developer confidence in nearly all UK regions, which is slowly feeding into construction projects.

“The construction sector has seen two false dawns already in its recovery. The momentum and hugely improved sentiment suggest that we are not about to witness a third.

“But while the client pipeline and the ONS data both suggest the industry is picking up speed, we are still a long way from escape velocity.”

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