U.K. Construction Output Recovers In April

Office for National Statistics (ONS) figures published today show that construction output rebounded in April by 2.5% month-on-month, though remained down 3.7% compared with one year earlier.

However, analysts said that the April revival alone, while better than expected, was not enough to make up for a disappointing start to the year for the country’s construction companies.

All new work increased by 2.9 percent and all fix and maintenance increased by 1.9 percent. It was also faster than the 1.2% rise forecast by economists.

However, the underlying performance of the sector remains sluggish as output in the three months to April fell 2.1% compared to the previous three months.

Howard Archer, chief United Kingdom and European economist at IHS Global Insight, said April’s “decent looking increase masks an underlying weak performance as it fails to fully make up for the 3.6% month-on-month drop seen in March when activity may well have been hit by the earlier Easter this year”.

Construction new orders fell flat across the first quarter of 2016, growing by just one per cent compared to the previous quarter, with the final figure at £15.7 billion.

The second estimate of United Kingdom gross domestic product for the first quarter, released in May, estimated construction output fell 1.1% during the period. “We expect things to pick up after June 23”.

He added: “The underlying fundamentals for the construction sector remain strong, so the modest fall in new orders may reflect a slight impact from uncertainty around the EU Referendum”. A reading above 50 indicates expansion.