Housing orders bolster construction growth

Construction orders rose by 5% in the year to June 2005 compared to orders in the previous twelve-month period, according to the DTI. The second quarter of this year was strongest, with orders up 9% compared to the same quarter a year earlier.

Orders in the second quarter were also up 9% compared to the previous quarter, with increases in all sectors except public non-housing and private commercial orders.

Milan Khatri, chief economist at the RICS, said: “The figures show continued steady growth. There is some cooling off but overall things are looking good.” He said the year to June 2004 saw an increase in construction orders of 21% in its first and half and 8% in its second half.

“Between January and June this year the rate of growth has slowed. Much of the orders come from the private and commercial sector, so it’s not surprising there’s a slowdown, the economy is slowing down after all,” said Khatri.

He added that on the positive side, housing orders had picked up over the past two to three years. Private housing orders in the year to June 2005 rose by 15% compared to those in the previous year, according to the DTI. Orders in the second quarter of 2005 were particularly impressive, rising by 24% compared with the previous quarter and 26% compared with the same quarter a year earlier.

Public and housing association orders rose by 6% in the year to June 2005 compared to the year to June 2004.

A decline was recorded in public non-housing orders, which fell by 7% in the year to June 2005 compared to the previous 12 months. Private commercial orders in the year to June were unchanged compared to the previous year.