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Construction surges in Q2 after poor start to 2018

Construction activity grew by 3.3 per cent for the three months to July after a sluggish start to the year, the latest figures from the Office of National Statistics (ONS) have revealed.

Total new work increased by £1.34bn to £13.9bn in July 2018 due to a rise in all new work, which grew to £9.1bn, outweighing a fall in repairs and maintenance programmes.

The boom in work comes after bad weather hampered construction work in the first three months of the year.

The most notable contributions to growth in activity came from infrastructure and private housing new work, which grew by 11.5 per cent and 10.4 per cent respectively.

In comparison with July 2017 construction output grew by 3.5 per cent. This year-on-year increase saw a 4.3 per cent increase in new work and a 2.2 per cent increase in repair and maintenance.

The rise in output however comes as the level of new orders in the sector falls, with all new work down 6.5 per cent quarter-on-quarter to £10.8bn, with new private housing dropping 20.8 per cent to £3.2bn, and public infrastructure dropping by 23.1 per cent to £1.2bn. Private industrial orders also fell by 18.2 per cent to £902m.

The volume of new orders has now fallen for the third consecutive period according to the ONS. 

Commenting on the construction output figures, McBains chief executive Michael Thirkettle said: “After the last set of ONS figures showed an upturn following several months of decline, this second successive rise represents another much-needed boost to confidence in the sector.

“Underlying growth remains fragile however, and the real test will be if this can be sustained in the months to come, given the uncertainty over issues like Brexit that have impacted on UK companies’ commitment to new projects over the last two years.”

Scape Group chief executive Mark Robinson said: “With only six months to go until the UK’s EU exit date, it is absolutely essential that the government does all it can to keep the current optimism going.

“Greater clarity is critical to prevent current confidence waning, and quick and bold decisions now on both long and short-term projects would go some way to continuing this momentum through the remainder of the year.”

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