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Private housing fuelling construction growth

Private housing fuelling construction growth

Construction output continues to grow overall but infrastructure remains a major concern

LATEST figures from the Office for National Statistics (ONS) confirm that the construction industry is generally improving. Overall, construction output in August was 4.0% higher than it was one year ago, with private housing largely fuelling the growth.

Commenting on the figures, Construction Products Association economics director Noble Francis said: ‘These figures add further confidence to our view that the industry is gradually exiting from one of the worst downturns in its history. Private housing is clearly leading the activity, showing a significant year-on-year rise of 18.0%.

‘Even excluding private housing, the overall industry was up 1.7% from this time a year ago. Other areas of strength included the largest sector – commercial offices and retail – which rose 8.4% year-on-year, and the repair and maintenance sectors for both non-housing and private housing, which saw year-on-year growth of 4.1% and 5.6% respectively.’

However, Mr Francis said infrastructure remains a major concern as year-on-year output in this sector fell 5.5%. ‘Despite repeated government announcements of capital investment for the sector, infrastructure output has in fact fallen 11.0% since the Coalition came to power,’ he commented.

Looking ahead, the Association forecasts construction output growth of 2.2% in 2014 and 4.5% in 2015.

It says the recovery will be led primarily by private housing in the short term, but will only be sustained in the long term with broader growth from other sectors – most notably the infrastructure sector, where government announcements will need to translate into real activity on the ground.

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