Over recent months there’s been a growing mood to exploit the power of quantitative easing to accelerate growth in key parts of the UK economy and for the Bank of England to buy other assets other than Gilts – UK Government bonds. Here in Part 1 I’ll be looking at the background to these calls and, in Part 2, I’ll look at why, if we are to experiment further with QE, we should look to housing as the alternative to Gilts…
When construction indicators point in different directions what are we to make of it? The February Markit/CIPS purchasing managers’ index released today is very bullish, suggesting the best growth for 14 months and the best month for new business for 21 months. Meanwhile, the official ONS construction new orders figures for the final quarter of last year were very downbeat. They showed a gloomier picture, with orders down on the previous quarter by 2.5%, down 15.4% on a year earlier….
Thanks to swift and generous efforts made by the Office for National Statistics I can give you the latest official update of activity in the rental and leasing world. The latest data – a non-published sub-set of the Index of Services released this morning – shows a continued rise in the amount of work done by plant hire firms in the final quarter. I have also updated the construction output figures to the latest index provided in the GDP series….
The Construction Products Association has called on the Chancellor to pave the way so that quantitative easing can be exploited to fund house building. And there seems to be growing backing within the construction sector and without for using the quantitative easing machine as means to increase the number of homes being built.
Plant hire firms continued on their journey of rebuilding prices throughout last year with the latest figures from the services producer prices series showing another upward tick. Prices in the final quarter of 2011 were up about 3% on a year ago. Against consumer price inflation, currently running at 3.6%, and in the face of upward pressure on costs, this hardly suggests times have got easy for the sector. But with activity recently on the up, see graph, and with firms…
Encouraging perhaps, the latest statistics on the prospects and performance for architects and engineers seem to be of the “not so negative” variety. The December data from the Office for National Statistics’ Turnover and Orders in Production and Services Industries show what could be regarded as real growth for architectural and engineering services in 2011. Last year the sector delivered in cash terms £43.3 billion of turnover compared with £41.4 billion in 2010. This was a rise of about 4.5% and…
The latest official house building statistics to emerge underline the massive task ahead for the Government if it is to meet its promise of boosting English house building rates to a level above that achieved before the recession. It was in September 2010 that Grant Shapps ambitiously announced this “Gold Standard” against which he, as housing minister, would be judged.
I and others have long held doubts about accuracy of the private housing repair and maintenance series within the construction output data. And if there is a fault with the data series it is important that it be addressed if policy makers, analysts and academics are not to draw wrong inferences from it.
The latest official statistics show construction output fell by 0.5% in the final quarter of last year. That is in line with the statisticians’ estimate put out with last month’s GDP data. This fall fits with the raft of other industry data that has shown construction work falling. And it also fits with industry forecasts that construction is set to dive into recession again for the best part a couple of years.
What makes the latest survey of specialist contractors by the trade body NSCC of particular concern is that, for the first time in two years, it hints heavily at recession. It’s in the nature of surveys such as this to bounce about a bit, so it’s unwise to read too much into relatively small movements in its indicators, even if the readings are taken quarterly. And it should be noted that changes in sentiment about wider issues than construction can…