Key Statistics: 2 Sept 2014

Construction

• The recovery in the construction industry stalled in the second quarter, but overall output is still up 4.8% year-on-year. The latest Office for National Statistics (ONS) construction output figures suggest there was no growth between Q1 2014 and Q2. This is an upward revision from the 0.5% fall in an earlier estimate of output issued by the ONS last month. However, when comparing Q2 2014 with the same period a year ago, output rose 4.8%. The figures also showed that output rose 1.2% in June, compared with the previous month, with new work up by 0.9% and repair & maintenance work up by 1.6%. When comparing Q2 with Q1, the figures showed new housing grew 3.5%, with the level of new housing reaching its highest level since the final quarter of 2007.

• Buyer demand has plateaued and sales growth moderated as the UK housing market ‘pauses for breath’. Demand for new homes fell in July, the first monthly decline since January 2013, while the supply of new properties coming onto the market increased for the second consecutive month, according to the July RICS Residential Market Survey. As a result of the rebalancing in demand and supply, house price growth across the UK appears to be moderating, with a net balance of 49% more respondents reporting an increase in prices in July (from 52% in June and 56% in May). In London, both sales and new buyer demand fell more sharply than elsewhere, with enquiries falling at their fastest rate since April 2008 and a net balance of 10% more respondents reporting an increase in prices (down from 30% in June).

• The latest Construction Trade Survey found that activity rose in the second quarter of 2014 across all areas of construction, including building contractors, SMEs, specialist contractors, civil engineers and product manufacturers. Future growth, however, may be put at risk by rising costs. Commenting on the survey, Dr Noble Francis, Economics Director at the Construction Products Association, said: “Firms across construction reported rises in output during Q2 and the majority of the industry is expecting activity to rise over the next 12-18 months. Unsurprisingly, private new housing was the key driver of construction activity. On balance, 41% of contractors reported that private housing output rose in Q2 compared with a year ago.”

• More homes are being built thanks to the government’s action to help homebuyers and fix the broken housing market, according to Housing and Planning Minister Brandon Lewis. Statistics published in August showed 36,230 new housing starts in England between April and June - an increase of 18% on the same quarter last year. It brings the total number of starts over the last 12 months to 137,780, a 22% increase on the previous year and the highest level of house building since 2007. Mr Lewis said today’s figures are further evidence that the government’s long-term economic plan to improve the housing market is working.