BlogLatest NewsSurging construction sector provides boost to growth

Surging construction sector provides boost to growth

Stronger estimates of construction output in the third quarter are likely to lead GDP growth for the period to be revised up by 0.1 percentage point.

Faster than expected growth in the construction sector could see UK output revised up in third quarter, official data showed on Friday.

Current estimates of growth in the period have assumed that construction output rose by just 0.8pc.

Large upwards revisions to the data now imply that GDP growth was 0.1 percentage point stronger.

Assuming no other changes, the construction sector’s strength will likely see GDP for the third quarter pushed up from 0.7pc to 0.8pc.

The alteration would mean that the economy had not slowed down as drastically as previously thought, cooling off from 0.9pc growth in the second quarter.

However, the Office for National Statistics (ONS) update also revealed that the sector is off to a weak start in the fourth quarter.

Sectoral output fell by 2.2pc in October compared with the previous month, with new work and repair 1.7pc lower, while maintenance dropped by a whopping 3.1pc.

“This series is plotting a saw-tooth pattern”, said Alan Clarke of Scotiabank, “up 2pc one month, down 3pc the next, then back up and so on”.

“We are likely to see a bounce next month”, he added, “I don’t believe for one minute that year-on-year construction output growth is near-zero”.

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