Data from the Office for National Statistics, released today, highlights a dramatic increase in construction new orders during the second quarter of 2013. Overall, new orders in the four quarters to Q2 were 12.0% higher than a year earlier, worth £5 billion, with double-digit growth in almost every sector.
In Q2 2013 the volume of new orders is estimated to be 19.8% higher than Q1 2013. The Q2 2013 estimate shows a 32.8% rise compared with Q2 2012. There were large rises in construction orders for new housing where both public and private new housing showed strong growths enabling all new housing to record its largest growth (19.4%) since Q3 2010 and its highest volume since Q4 2007.
Commenting on the ONS figures, Dr Noble Francis, Economics Director at the Construction Products Association said; ‘Although construction output grew in the second quarter of 2013, this was purely driven by housing, which in turn has been boosted considerably by Help to Buy. However, the latest figures on new orders show that the £111 billion construction industry is ready to enjoy a sustained recovery over the next two years.
‘A rise in house building has been augmented by increases in major infrastructure and a return to growth in schools and hospitals construction. Infrastructure new orders in the four quarters to Q2 were 19.8% higher than a year earlier and new orders for public non-housing, which primarily covers schools and hospitals, grew 12.6% over the same period.’
‘New orders in private commercial, the largest construction sector worth £21 billion each year, fell 4.9% in the four quarters to Q2. However, new orders in the second quarter were higher than in the previous quarter and appear to have passed the nadir, suggesting growth in private commercial medium-term.’
‘Overall, there are strong positive signs of a sustained recovery in construction output, not just in housing but also in private and public construction sectors. Our forecasts anticipate that construction output will grow 12.2% by 2016 as these new orders feed through into activity on the ground, providing an additional £11.8 billion for the industry and the wider economy.’
Steve McGuckin, UK managing director of the global construction and project management consultancy, Turner & Townsend, comments: “There is always a lag between wider economic growth and a surge in construction, and this recovery is no different. Construction is back, with pressure already growing on its supply capacity. Output is creeping up, but the pipeline is racing ahead – in the second quarter it jumped nearly a third on the same time last year. While the industry is now more upbeat than it has been for a few years, the best players are facing a new challenge – how to respond to rising demand.”