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Rain pours cold water on UK construction figures as public-private gap continues to grow

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Rain pours cold water on UK construction figures as public-private gap continues to grow

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Published by Jon Land for 24dash.com in Central Government and also in Housing

Rain pours cold water on UK construction output as public-private gap continues to grow Rain pours cold water on UK construction output as public-private gap continues to grow

A pronounced gap is continuing to develop between the construction output of the private and public sectors, according to figures released today.

Poor weather in February hit overall UK construction output, which was down 2.8% on January, ONS figures showed. But the overall picture is looking far healthier when compared to a year ago. The three monthly data (December to February) showed a rise of 4.5% compared to the same period 12 months previously.

However, the ONS said an 'obvious gap' had now developed between the public and private sectors with construction output (excluding infrastructure) funded by public sector clients down by 3.2% between January and February 2014, compared to a 2.5% fall in the private sector.

Long-term the picture is worse. Comparing the February 2014 data with figures from January 2010 private sector output has increased 12.3% while public sector output has decreased 15.4% over the same period. Private sector construction growth has been partly boosted by the government's help to buy scheme while affordable and social housing grant funding has fallen away.

Overall spending on new housing, while increasing 40.4% since January 2013, still remains slightly below the level recorded in March 2011.

The picture in the private sector data appears more robust in terms of output compared to that seen in the public sector. In terms of the February 2014 data, the ONS said there was a particularly noticeable fall in the volume of private new housing during the month. Private new housing, which had shown strong growth since March 2013, fell 6.3% between January and February.

Simon Rawlinson, head of strategic research and insight at EC Harris said the latest data was “disappointing”.

He said the 2.8% month-on-month fall was “likely to be a short term blip but acts as an useful reality check”.

He added: “Longer term measures all indicate continuing positive growth.

“Poor weather in January and February is likely to have been a significant contributor to the fall and output is likely to rebound in March - particularly in (private) housebuilding ahead of the spring sales season."

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