Construction output grows as wider economy shrinks, official figures say

Construction output grew by 0.9% in April bucking the trend of the wider economy which shrank during the month, according to official figures.

The ONS said overall output fell by 0.3% in the month but construction’s growth followed the 0.5% rise in March and meant in the three months to April, output in the sector was up by 0.5%.

The better than expected rise in construction’s monthly output came from both new work and repair and maintenance, which grew by 1.4% and 0.3%, respectively.

The ONS said the main contributors to the monthly increase were infrastructure new work and private housing repair and maintenance, which grew by 2% and 1.5% respectively.

Within new work, the largest positive contributor came from infrastructure new work, which grew by 3.5%. In repair and maintenance, the largest positive contributor came from public housing R&M, which grew by 2.7%.

Meanwhile, buyer enquiries for homes have fallen for the fifth consecutive month, according to the Royal Institution of Chartered Surveyors (RICS).

The RICS’ latest survey of the UK residential market found a net balance of -26% of survey respondents reporting a fall in new buyer enquiries in May, while sales have continued to fall with a net balance of -28%.

However, the survey found expectations of sales over the next three months had improved slightly and were now “broadly flat rather than falling”.

Around a quarter of respondents expected sales volumes to increase over the next year, while new listings for sales are climbing steadily with a balance of +7% last month, the eleventh consecutive month of growth.

RICS senior economist Tarrant Parsons said the market remained “somewhat subdued, with ongoing uncertainty around global trade policies and the dampening effect of transactions being brought forward ahead of the Stamp Duty changes at the end of March continuing to weigh on buyer activity.”

“However, near-term sales expectations are showing signs of stabilisation, suggesting that while muted conditions may persist in the short term, a further deterioration appears unlikely. 

“Looking ahead, the outlook is more optimistic, with respondents anticipating a gradual recovery in sales activity over the next twelve months.”

He added that the pace and extend of any improvement will partly depend on the Bank of England’s ability to continue cutting interest rates.