UK housebuilding booms but construction sector flags | 2016-04-17 |

UK housebuilding booms but construction sector flags

17 April, 2016 12:00 AM printer

LONDON: Housebuilding in Britain picked up to a record high in February but the rest of the construction sector struggled amid signs that uncertainty over the EU referendum and public spending cuts are denting activity, according to official figures.
The Office for National Statistics said private housebuilding rose 3.9per cent from January, the fastest growth for 10 months and taking it to the highest level since records began in 2010, reports The Guardian.
The housebuilding figures will be welcome news for the government following pledges to address Britain’s long-standing housing shortage. However, other indicators from the construction sector have been more downbeat and more timely surveys suggest housebuilding waned in recent weeks.
The ONS said the whole construction sector, which makes up 6per cent of the UK economy, shrank 0.3per cent in February. That was worse than economists’ forecasts for no change in output, according to a Reuters poll.
In the three months to February, construction output was up 1.5per cent, the fastest growth for almost a year, thanks largely to strong monthly growth in December.
“Despite construction output dipping for a second month running in February, it still looks likely that construction saw some growth in the first quarter of 2016,” said Howard Archer, economist at IHS Global Insight.
But he said the outlook remained tough for building companies. “With output muted over the first two months of the year and March survey evidence from both the purchasing managers and the Bank England’s regional agents soft, it does appear that the construction sector is currently finding life hard going,” Archer said.
A survey of the sector released earlier this month, the Markit/CIPS UK construction purchasing managers’ index (PMI), showed housebuilding slowed in March to the weakest pace for more than three years as construction firms said an uncertain outlook had curbed spending among clients. On Thursday, the Royal Institution of Chartered Surveyors (RICS) warned that the 23 June referendum and recent changes to stamp duty had created a climate of uncertainty that could lead to falling sales and prices in the housing market.