House-building surge boosts UK construction industry

British construction rose in October, helped by the biggest rise in housebuilding in more than two years.

by Elizabeth Anderson
Last Updated: 16 Dec 2013

Fuelling speculation that another housing boom could be on the cards, a big jump in house building pushed output in the UK construction industry up 2.2% in October, the Office for National Statistics (ONS) said today.

New housing rose 5.8% from the month before, while repairs were also up. Despite a fall in project commissions in other parts of the construction industry, the house building rise was enough to boost construction output overall, marking a sharp improvement on September when output shrank by 0.5%.

The latest 2.2% rise means that construction output is up 5.3% in total for the year, and suggests the industry is turning a corner after being badly hit by the recession.

Compared to the same time a year ago, new orders are up 17.8%, driven by a 41.6% increase in new housing and a 21.3% increase in private commercial work, which offset a fall in public contracts. Construction accounts for about 6% of UK GDP.

‘The introduction of help-to-buy schemes has buoyed the housing market and may be contributing to relatively strong growth in house prices, which grew by 3.8% in the year to September 2013,’ the ONS said.

This contrasts with construction growth in the industrial sector, which is still ‘weak and negative.’

However, the housing market still has a long way to go to catch up with its pre-recession performance. Just 135,000 homes were built in the year to April 2013, down from the more than 200,000 homes a year that were built in the years running up to the financial crisis, government figures show.

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