Private housing leads the way in construction industry recovery according to Barbour ABI

Michael Dall, lead economist at construction intelligence specialist, Barbour ABI, comments on ONS construction new orders/output figures:

“Recent reports have indicated a small but steady increase in private housing construction and today’s figures from the Office of National Statistics (ONS) are no different, again suggesting it is this sector carving out the beginnings of a construction industry upturn.

“For the first time, the ONS has issued its revised Construction New Orders data. Where previously this was based on a sample survey of construction firms, today’s figures are based on comprehensive construction project data collated by Barbour ABI, following a new partnership agreement with the ONS.

“The residential sector is performing well, and encouragingly, we’re also seeing signs of strength in other sectors. Infrastructure appears to be picking up pace, with a number of particularly prominent wind farm and renewable energy projects. Meanwhile, major projects such as the Scalpel tower, and the next phases of the ongoing redevelopment of Regent Street have been significant contributions to new orders data for the commercial sector.

“In addition to the new orders statistics, the ONS issued the construction industry output figures for July which also indicate a strong performance in the private housing sector. This is a common theme, which was also seen in the Construction Products Association (CPA) and Barbour ABI Index. The index for July shows that contracts awarded in private housing have increased 25 per cent when compared with the same month last year – a significant improvement.

“When you consider the challenges the construction industry has faced previously, it’s clear that this is definitely a period of positivity which is reflected by a shift in sentiment. However, this must be viewed with caution. The construction industry is still significantly below its pre-recession peak and we’ll need to see these trends continue if the industry is to make a sustainable recovery.”