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Construction sector swings back to growth in third quarter

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TOPSHOT - Construction cranes are pictured near Tower Bridge in London at sunrise on January 18, 2017. British business leaders welcomed Theresa May on her Brexit clarity Tuesday but insisted the UK prime minister must deliver on her pledge to secure access to the EU single market. In a speech yesterday, May said Britain would pull out of the European single market to control EU immigration, as she unveiled plans for a clean break from Brussels for the first time. / AFP / Daniel SORABJI (Photo credit should read DANIEL SORABJI/AFP via Getty Images)

Britain’s construction sector dodged a recession and swung back to growth in the third quarter, despite a slight dip last month.

Construction output increased 0.6 per cent, or £253m in the three months to September, from months of turmoil caused in part by Brexit uncertainty. It follows a decrease of 1.2 per cent in the second quarter.

Read more: UK avoids recession but annual growth slowest in almost a decade

Figures were higher than expected, according to the latest ONS data, with growth in housing, commercial and industrial new work.

Private industrial work was an especially strong performer, with firms enjoying a 7.2 per cent rise in work across the segment. Private housing and commercial rose 1.8 per cent and 1.5 per cent respectively over the period.

New work rose 1.4 per cent, but offset by a fall in repair and maintenance of 0.8 per cent.

However, the industry was tempered by a slight slowdown in the month of September itself, which heralded a 0.2 per cent dip in output. This was driven by a 2.1 per cent fall in repair and maintenance work.

Gareth Belsham, director of property consultancy Naismiths, said: “Construction has emerged as the economy’s ‘come back kid’. After months of flat or falling output, the sector came out swinging in the third quarter.

“While the huge size of Britain’s service sector means it must take the bulk of the credit for dragging the economy back to growth, construction deserves plaudits for pulling off the most Houdini-like turnaround.

“Activity is growing strongly, and the growth is refreshingly broad-based – with new infrastructure, commercial and residential building all up.”

Mark Robinson, chief executive of construction sector group Scape, said the positive news did not remove responsibility for the government to end the political uncertainty over Brexit.

“While the UK has avoided a recession by the skin of its teeth, there is still a long way to go until we experience any kind of bounce back in business optimism and we still need to see the government seriously commit to propping up industry skills and funding in the lead up to 31 January and beyond,” he added.