Key Statistics: 17th September 2013

Last Updated:

16th September 2013

Construction

KPMG has issued a report suggesting construction demand is set to “rocket” following a string of positive forecasts. The bullish prediction comes as construction buyers reported the biggest upturn in workload for six years last month. Richard Threlfall, KPMG’s UK Head of Infrastructure, Building and Construction said: “After so many years in the doldrums it is great to see further evidence of construction activity finally picking up. Sentiment across business has decisively shifted, with the positive outlook helping to drive higher construction output. It is particularly encouraging to see the improvement not only in the residential sector but in the commercial and civils sub-sectors as well.”
Tender prices “bottomed out” in the first half of 2012, the RICS’ Building Cost Information Service (BCIS) has said. The BCIS says it expects tender prices to grow slowly from this year, with steep increases expected by 2018 due to projected growth in demand. Prices grew particularly strongly in the fourth quarter of 2012, up 6.4% on the previous quarter and in the first quarter of this year were still significantly up on the previous year, by 5.6%.
Hometrack have reported that housing market activity has not registered the traditional seasonal downturn over August. Demand continued to grow, up 1.1%, on the back of improving market sentiment. Over each of the last 3 years demand has fallen during the month of August. Supply has remained constrained, growing by just 0.8% over the month. Average house prices grew by 0.4% over the month, following a 0.3% increase in July.

UK Economy

British unemployment is expected to fall to the Bank of England's 7 percent threshold for lifting interest rates earlier than the central bank expects, a Reuters poll found on last week. The poll of 45 economists, found all but a handful saying the unemployment rate would reach the Bank's target ahead of its late-2016 prediction - the point where it said it would consider raising interest rates.
Surveys showed business activity in Britain rose last month at a pace unmatched by any of its major G20 peers, a huge contrast to the early part of the year when there was widespread talk of a "triple dip" recession. The Organisation for Cooperation and Development said the UK economy is growing at an annualised pace of around 3.7 per cent this quarter and after the latest batch of indicators some economists reckon it could top 4 per cent - that after surprisingly strong 0.7 per cent quarter-on-quarter growth in Q2. "We're enjoying a sugar rush at the moment," said Alan Clarke, director of fixed income strategy at Scotiabank in London, citing pent-up demand in the housing market and government stimulus to improve access to it. I don't think that continues forever. We won't be seeing people increasing their spending in excess of their disposable incomes next year, which is what they're doing right now. So we're on borrowed time on that front," he said.