ONS figures show growth ending a run of five consecutive monthly falls

Construction output grew in February, ending a run of five consecutive monthly declines, according to the latest figures from the Office for National Statistics (ONS).

Output rose a non-seasonally adjusted 8.6% on the month in February representing the largest monthly increase since the 18.1% recorded in March 2010. However the figure was still down 0.3% on February 2010.

Poor construction output figures from December and January are expected to impact heavily on first quarter GDP growth. The 6.8% fall of construction output in January, which unlike December were not weather related, sparked fears of a more serious downturn.

The February figure however should help mitigate the effect of  negative construction output on Q1 GDP.  

Commenting on the latest ONS construction data Simon Rubinsohn, RICS Chief Economist, said: 

“Construction output rebounded in February, according to provisional data released this morning, following the very disappointing figures for January. Even so, the latest reading is still only marginally above the December number, which was adversely affected by heavy snowfall.

“As a result, the construction sector will contribute negatively to first quarter GDP growth, limiting the scope for a wider economic recovery after the weak Q4 result. This may be sufficient to deter the Monetary Policy Committee from raising the base rate in May.

“Critically for the construction industry, the latest data questions whether private sector demand is going to be sufficient to offset the cuts in public spending which are just beginning to take effect.

“This is broadly consistent with the findings of the most recent RICS Construction Survey and explains why we expect output in the sector to be broadly flat this year.”