ONS figures show monthly and quarterly year-on-year increase in output
Longer term figures recorded for construction output suggest optimism for the industry.
Latest figures from the Office for National Statistics (ONS) show that construction output has experienced yet another month of year-on-year growth.
When compared with April 2014, the rate of growth recorded in April 2015 has grown by 1.5%, which represents the 23rd month in succession where the pattern has shown an increase in output in the construction industry.
Today’s ONS figures are notable because for the first time, the interim solution for the Construction Price and Cost Indices has been implemented and replaces the existing deflators that have been relied upon since the first quarter of 2014.
In all statistical analysis provided by ONS, output is defined as the amount charged by construction companies to customers for the value of work produced during the period in which data is recorded, with VAT and payments to subcontractors excluded.
Despite the year-on-year increase reported in April, there were results that weren’t as positive. The monthly rate of output from March to April 2015 has gone down by 0.8% after a rise between February and March.
However, it is thought that the annual increase reported in April is a better long-term indication of performance in the construction industry.
The main reason for the fall between March and April has been attributed to repair and maintenance (R&M) work, which fell by 4.8%. More encouraging news came in the shape of a rise in new work during that time, which shot up by 1.6%.
The ONS figures here show that the main factor for the rise in new work was an increase in new housing – an increase of 5.4%.
Housing has been high on the Government’s agenda since the General Election and it is reasonable to think that, though there will be some fluctuation in the future months and years, the amount of commitment put into this will ensure that new housing continues to perform well.
In April 2015, both public and private housing both performed well and increased.
Again, it could be seen that other figures in the ONS report temper the optimism. In this case, it is because a fall in output has been recorded in the first quarter of 2015. However, the 1.1% drop between January and March initially reported has been revised to just 0.2%, which in itself resulted in a slight upward revision of GDP.
More encouraging news came in the form of new orders having increased by 0.4% when compared with Q4 2014, and all of infrastructure, private industrial, new housing and all other work recorded rises in output.
As with the monthly year-on-year figures, the quarterly year-on-year equivalent has also shown a huge increase of 8% from those recorded in Q1 2014.
These year-on-year comparisons provide a decent indicator of the pattern in the longer term and are cause for much optimism moving forward.
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