Construction output bounces back

According to new statistics from the Office of National Statistics (ONS), construction output bounced back in April by 2.5% month-on-month.

The year-on-year figures were less positive, however, down 3.7% on the April 2015. New orders for Q1 were down too – at 1.2% compared to both Q4 and Q1 in 2015.

Despite that mixed set of stats, the Construction Products Association (CPA) remained positive for the immediate future.

“Today’s output figures are, of course, encouraging, but what is of greater interest are the ‘forward-looking’ new orders, which fell 1.2% in Q1,” said Professor Noble Francis, CPA Economics Director.

“This was likely led by a 17% drop in the private housing sector for Q1 versus Q4, though orders in this sector remained up 18% versus a year ago.  Other data from across the sector show that private house building activity is already improving.  Still more encouraging is that new orders in the infrastructure sector continue to go from strength-to-strength, up 27% in Q1 versus Q4 and up 16% versus a year ago.  As we’ve highlighted in our own forecasts, this sector looks set to lead activity for the wider industry over near-term.

“The underlying fundamentals for the construction sector remain strong, so the modest fall in new orders may reflect a slight impact from uncertainty around the EU Referendum.  We would also expect new orders in Q2 to suffer a greater impact from this same uncertainty; however, this could all be offset in the second half of the year once the vote is out of the way.”