Construction sector boosts GDP growth
DESPITE showing a slowdown in growth from the 1.2% achieved in the second quarter of 2010, this week’s economic growth figures for the third quarter were higher than many leading economic experts had predicted.
Pundits had widely been expecting growth to be around 0.4% but preliminary GDP figures released this week by the Office for National Statistics (ONS) revealed that the UK economy grew by double this amount, increasing by 0.8% in the three months from July to September.
According to the ONS, just one or two sectors made a big difference to the latest growth picture, as was the case in the previous quarter, and one of these sectors was construction.
Commenting on the latest GDP data, Ian McCafferty, chief economic adviser with the CBI, said growth in the UK economy had again been much stronger than expected and momentum in the recovery appeared to be holding up well.
‘Growth was broad-based with manufacturing activity remaining buoyant and services continuing to grow firmly. But the strength of production within the construction sector was the main surprise,’ he said.
During the weather-affected first quarter of 2010 construction contracted by 0.8% but then recovered strongly in the second quarter to achieve 9.5% growth. With the latest statistics showing another 4% growth in the third quarter, this means construction has grown by 11% in the 12 months since the recession ended.
As one of the sectors that was worst hit during the recession, construction undoubtedly has significant scope for growth during the recovery, but whether the recent momentum can be maintained once the cuts to public sector capital investment start to take hold next year remains to be seen.
Pundits had widely been expecting growth to be around 0.4% but preliminary GDP figures released this week by the Office for National Statistics (ONS) revealed that the UK economy grew by double this amount, increasing by 0.8% in the three months from July to September.
According to the ONS, just one or two sectors made a big difference to the latest growth picture, as was the case in the previous quarter, and one of these sectors was construction.
Commenting on the latest GDP data, Ian McCafferty, chief economic adviser with the CBI, said growth in the UK economy had again been much stronger than expected and momentum in the recovery appeared to be holding up well.
‘Growth was broad-based with manufacturing activity remaining buoyant and services continuing to grow firmly. But the strength of production within the construction sector was the main surprise,’ he said.
During the weather-affected first quarter of 2010 construction contracted by 0.8% but then recovered strongly in the second quarter to achieve 9.5% growth. With the latest statistics showing another 4% growth in the third quarter, this means construction has grown by 11% in the 12 months since the recession ended.
As one of the sectors that was worst hit during the recession, construction undoubtedly has significant scope for growth during the recovery, but whether the recent momentum can be maintained once the cuts to public sector capital investment start to take hold next year remains to be seen.
