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.
This is no ordinary recession. This is a serious depression, the end of which still looks to be at least a couple of years away and possibly a lot further. If that proves the case it would have lasted longer than the Great Depression of the 1930s, although the recession would not have been as quite as deep. The well respected economist and Financial Times commentator Martin Wolf recently wrote: “The UK is in the midst of what is set…
The latest official figures on economic growth are not encouraging. They are better than some feared. But the data all point to very weak growth once a host of special factors are taken into account and the general pattern is considered. The official statisticians at ONS suggest it is better to look at the second and third quarter GDP growth figures combined to get a better picture of the economic activity. That would put average quarterly growth of about 0.3%….
The prospects for construction are worsening, that’s the picture painted by the latest set of main industry forecasts. Even the least pessimistic of the forecasts, from Leading Edge, at best suggests the industry now looks to be facing two years of a second dip into recession. Hewes, which remains the most pessimistic of the forecasters, finds little reason to suggest that the industry will still be plunging in 2013, while the Construction Products Association forecasters reckon the industry will not…
As the parallels with the 1930s depression become increasingly unavoidable, I sense a new romantic surge of interest in the notion of a private-sector-led house-building boom driving economic recovery. For those not familiar with the 1930s private house building market, completions in England in 1934 hit almost 290,000. That is near on three time current levels. Never before nor since has there been such numbers of private homes built in England. The public sector was not workshy over that period…
I was wrong. Not all the construction forecasts are being revised down this time around. Experian has slightly lifted its expectations for construction growth for this year and next compared with its summer forecast. In the summer it was looking at a fall of 2.6% and 3.5% for this year and next, those expectations are now smaller falls of 2.1% and 3.3%. This is despite a lower forecast for GDP growth. Experian had revised its summer forecast quite a bit. And…
Be prepared for a slower recovery than we were expecting – that’s that message from the first of autumn construction forecasts to emerge. Leading Edge had already penned in a double-dip recession for construction when it last produced a forecast in March, but now it expects the fall to be deeper and the recovery to be slower.
Construction plant hire prices remained subdued in the second quarter of this year showing no sign of growth after the mini spike in prices recorded late last year, according to the latest services producer prices index. This puts prices down on the same time a year ago by about 0.6% in cash terms and leaves prices more than 8% lower than at the peak in 2006. With cost increases squeezing most if not all businesses, this suggests margins will remain…
Lost in the confusion caused by the adding up error made by the ONS in the original release last week of the construction output figures was one rather significant change to the data series. In rough and ready terms the post-recession construction industry is now officially almost 7% bigger than we used to think it was. Meanwhile, the collapse in construction between early 2008 and early 2010 is now officially calculated to be 16.0% rather than 13.7%.
The latest GB construction output figures follow the earlier estimate made for the UK GDP series, which put growth in the second quarter at 0.5%. This was a bit lacklustre. The figures were particularly disappointing after the ONS put out a release which in error put the growth rate at 2.3%. This erroneous figure pointed to an upward revision of 0.1% to be added to GDP when it is next revised. This hope has now been dashed and will not…