UK construction output flat in July on back of slowing housebuilding market

On an annual basis, output has risen 2.6 per cent – the slowest rate of growth since November, and down from June's three month high of 5.3 per cent, the data showed. 

 

Could this suggest a tailing off after the green shoots we saw late last year?  

 

We have already seen plenty of reports pointing to a cooling in the housing market, certainly in London. Most recently the RICS/Halifax survey out on Monday suggested property sales had fallen for the first time since September 2012 last month. 

 

ONS figures back that up with private sector homebuilding rising 1.1 per cent in July, down from two per cent in June. 

 

The annual growth rate has slowed to a five-month low of 15.9 per cent. 

 

Meanwhile orders in the second quarter were down 4.3 per cent, compared with a 3.8 per cent rise for all new work. This was largely thanks to private commercial orders – shopping centres in particular – up 9.6 per cent across the sector. 

 

And last week, the Purchasing Managers Index (PMI) surged above consensus expectations with August's construction PMI climbing to 64 – its highest since January and well above the consensus line of 61.5. 

 

Overall, therefore, while there is undoubtedly a cooling off on demand in some areas, the sector is not looking too bad.