Commercial and industrial work drives construction output but high energy prices could add £1.6bn to product prices

Construction output continued to recover during the third quarter of 2006 but margins were hit by high energy prices.

The latest survey by the Construction Products Association and the Construction Confederation said that the rise in output was driven by more work in the commercial and industrial sectors, as well as civil engineering.

Allan Wilèn, economics director at the CPA, said: “Strength in these areas helped offset a disappointing performance in government funded areas that has heightened concerns that increasingly cash-strapped public sector clients are deferring planned projects.”

Stephen Ratcliffe, chief executive of the CC added: “It is key to the delivery of the government’s public sector services programme that the planned investment in infrastructure is not blown off course.”

The CPA has estimated that higher energy costs are set to add £1.6bn to product prices