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Construction output bounces back in second quarter

Construction output increased 0.9 per cent in the second quarter after falling in the first three months of 2018, according to the latest data from the Office for National Statistics.

The industry had seen output slump by 0.8 per cent in Q1 quarter on quarter, as activity was hampered by bad weather.

Q2’s increase was led by the repair and maintenance sector, in which output grew by 2.7 per cent quarter on quarter.

Output from new work was flat in the second quarter, however, as new-work sectors experienced mixed demand.

Infrastructure, industrial work and new public housing all saw output increase in Q2, with industrial the fastest growing at 6.2 per cent.

However, private housing and public work excluding housing both saw output fall quarter on quarter.

Commercial construction work, which has been on a slight downward trend since the start of 2017, was broadly flat over the three months.

Construction Products Association senior economist Rebecca Larkin attributed the Q2 growth to firms catching up on work lost at the start of the year.

“As expected, construction has caught up from its troubled start to the year, with strong growth in May and June as the warmer weather improved ground conditions for sites that stalled during February and March,” Ms Larkin said.

Recent PMI data for July also showed a significant jump in activity and reported that new orders hit a 14-month high.

Naismiths managing director Blane Perrotton said both sets of data “give cause for further hope”, but warned further growth could be hampered by political problems.

“With even Cabinet ministers now suggesting that a no-deal Brexit is looking increasingly likely, the confidence-sapping prospect of a Brexit cliff edge will continue to be a brake on the industry as developers defer investment until there is greater clarity on what a non-EU UK will look like,” Mr Perrotton said.

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