Partner Article

Cautious welcome for figures showing increase in new construction orders

Cheshire-based construction intelligence specialist Barbour ABI has cautiously welcomed news that new orders in the industry are increasing, warning that the overall picture remains inconclusive.

According to the latest figures from the Office for National Statistics, in July 2014 output showed continued year-on-year growth for the 14th consecutive month, increasing by 2.6%. However, this growth was the weakest since November 2013 (1.5%).

New orders for construction in the second quarter (Q2) of 2014 were estimated to be 3.8% higher than in the first quarter of the year.

There were increases in infrastructure (20.8%), private commercial (9.6%), public new housing (7.3%), and public other new work (0.3%). Private new housing and private industrial fell by 6.3% and 1.9% respectively.

Despite these falls the levels of these series were still higher than the downturn in this series which began in Q1 2009.

Michael Dall, lead economist at Barbour ABI, said: “It’s encouraging that new orders are continuing on a positive trajectory, but with the rate of growth slowing from recent quarters, this announcement still isn’t the silver bullet we need to dispel all concerns about the performance of the construction sector.

“What is particularly interesting in these figures is the growing strength of new orders in the private commercial sector and especially for office contracts where we’ve seen an increase by 29% in Q2 versus Q1 this year.

“Early indications from our monthly Economic and Construction Market Review however, point to a summer slowdown on the commercial side. We would need to see consistent growth in this area before we can confidently say it is having a real impact on the industry.”

This was posted in Bdaily's Members' News section by Simon Malia .