Latest ONS figures show strong growth in infrastructure and new housing work
Strong growth in the construction sector helped UK GDP growth to beat forecasts in the most recent quarter, according to the Office for National Statistics. Overall output rose 0.3% between April and June, less than the 0.7% seen in the first quarter but above forecasts of around 0.1%.
Within the sector, new work increased by 1.1% over the period, and repair and maintenance grew by 1.4%. The most significant positive contributor to new work was infrastructure, which grew by 3.2%.
Private new housing grew 1.5%, while public new housing experienced a significant contraction of -4.4%. Private housing was the most significant positive contributor to repair and maintenance, growing by 3.3%.
Meanwhile, the latest UK residential survey from the Royal Institution of Chartered Surveyors suggested that the housing market retreated slightly in July. The RICS found that tentative signs of recovery seen in previous monthly feedback had partially reversed.
More than 1,000 chartered surveyors are asked a series of questions as part of the survey, with the “net balance” expressed in the survey corresponding to the proportion of respondents reporting a rise in a metric minus those reporting a fall. For example, if 30% reported increased workloads and 5% reported a fall, the net balance would be +25%.
The “net balance” refers to the proportion of respondents reporting a rise in a metric minus those reporting a fall.
New buyer enquiries reported a net balance of -6% in July, down from +4% in June, while agreed sales saw a renewed deterioration, from – 4% in June to -16% in July.
Respondents expect a generally flat near-term sales outlook, with a net balance reading of just +1% being returned, compared with +7% the month before. Over a 12-month horizon, sentiment was slightly more positive, with a net balance of +8%.