The latest set of figures from the Office of National Statistics (ONS) shows that construction output in January 2014 rose 1.8% compared with December while new orders for the final quarter of 2013 increased by 1.5% as against the third quarter, providing positive signs for the industry for the rest of the year.
“The construction industry continued to see a recovery in activity,” said, Noble Francis, Economics Director, Construction Products Association said (CPA). “Output in January was 5.4% higher than snow-affected January 2013. New orders are an early indicator of future output, so the 1.5% rise during the final quarter of 2013 suggests that the growth in activity is also likely to continue over the next 12-18 months.
The figures showed that private housing was the key driver of construction growth in January with sector output 23.3% higher than a year earlier. New orders for private housing in Q4 rose 7.2% compared with Q3 and indicate growth for the sector in 2014 and 2015. The Association forecasts that private housing starts will rise 16% this year and a further 10% in 2015.
“Output in public non-housing, which primarily covers schools and hospitals work, has suffered greatly in recent years but looks set for a recovery,” stated Francis. “Output in the sector fell 34% between 2010 and 2013. In January, however, output was 2.2% higher than a year earlier and new orders in Q4 were 16.8% higher than in Q3, pointing towards sector growth this year.”
However, the CPA has warned that despite many government announcements of finance for large infrastructure projects over the last two years, output in the infrastructure sector fell by 2.3% in January compared with December and was 3.2% lower than a year earlier.
Of greater concern, infrastructure new orders in Q4 were 22.2% lower than in Q3. “It is vital that the government focuses on delivery of existing projects in the pipeline rather than further announcements,” concluded Francis.