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By Brian Green2011-08-15T08:57:00+01:00
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 be welcome, particularly in the light of weaker than expected data on manufacturing.
Without getting too technical, we might have expected some uplift in the 0.5% growth figure from the revisions made each month to the data on receiving late returns to the survey. Sadly this didn’t happen.
Although the chances are that this 0.5% will be revised up, what we see in the June figures is more evidence to suggest a slowdown after the surge in work created in large part by the fiscal stimulus and the restocking by housebuilders.
Yes, there was welcome growth after two quarters of decline. But it would have been very worrying if there had not been some uplift after two rather steep quarterly falls.
As we can see from the monthly current price data presented in the graph, last year saw a fairly sharp rise in output in June last year. This year the rise was lower.
We must be cautious about drawing too many conclusions from one month’s or even one quarter’s figures, but taken as a whole there is much in these figures to support the forecasters’ view that we will see a decline in output from here.
We are seeing consistent falls in public sector workloads and these are expected to accelerate.
And while infrastructure work seems to be pretty buoyant it seems very uncertain whether the private sector will fill the gap left by the retreating public sector.
The commercial sector is showing few signs of consistent growth. Meanwhile, the noises coming from the house building industry provide every suggestion that work in this sector may well remain flat or in modest decline after the mini-surge created by builders replenishing their pipelines.
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