Construction growth data puzzles economists

Aaron Morby 13 years ago
Share

Industry economists are challenging the latest Government output figures for construction, which have recorded growth of 13.5% in the last two quarters.

They warn that the skyrocketing output figures appear way out of step with what is actually happening on the ground.

The growth spurt in construction has fed into the UK’s overall GDP figures and helped to deliver higher than expected growth, now being seized on by Government as evidence of a strengthening recovery.

According to yesterday’s new preliminary Office of National Statistics figures construction output rose 4% in the last three months to September.

The remarkably high growth figure was down from a dizzying 9.5% growth spurt in the previous quarter, but has raised concerns about the accuracy of official Government statistics.

Noble Francis, economist at the Construction Products Association, said: “These figures are really surprising and do not reflect what is really going on.

“We are almost getting back what was lost during the recession in the second quarter growth figure alone and this is patently not the case.”

He added: “The ONS figures are clearly out of step with the industry’s own trade surveys.”

Even the lower growth figure for July-September sees construction stand out as the fastest growing industry sector by a long way, contributing 0.2% to a 0.8% rise in overall GDP.

This is higher than many forecasters expected for the UK and is being held up by Chancellor George Osborne as a clear sign of the economy strengthening.

The spectacular two quarters of growth have seen construction, at least officially, enjoy record-breaking 11% growth on a 12-month rolling basis since September 2009.

Brian Green, construction economic commentator at Brickonomics,  said: “There is a huge amount of scepticism among construction economists about Government growth figures.

“There are many question marks about the series of numbers introduced this year and how well they marry with previous figures.”

He added: “To put the latest numbers for construction output into context, we should be enjoying the same level of activity the industry experienced in 2007 when there were question marks over whether there was enough industry capacity to handle demand.

“This is clearly not where we are today.”

On the wider UK figures, Alan Clarke, at BNP Paribas, said: “Overall, a much stronger than expected reading. As ever probably likely to look very different after revisions.”

He added: “Bob the Builder, Can he Fix it? Yes he can, it seems.”

Latest news

McAlpine signs £500m Broadgate dual towers deal

Work to start on iconic 36-storey and 21-storey towers
9 hours ago

Worker rescued from collapsed four metre deep trench

Fire crews take six hours to save trapped builder near Blackwall Tunnel
13 hours ago

Gove puts another major building scheme on hold

Secretary of State starts another planning fight after M&S defeat
1 day ago

Greenwich University tenders £300m framework

Up to five firms will carry out upgrade and newbuild work at three campuses
13 hours ago

Work starts on Manchester 26-storey Obsidian tower

Contractor Domis starts Salboy's 10th Manchester scheme in seven years
11 hours ago

Race for £1.3bn West Midlands social homes framework

The Community Housing Group reboots tender race for new build housing
12 hours ago

Delancey submits £400m King’s Cross lab plans

200,000 sq ft lab/office project will be built above railway and tube tunnels just 4.5m below
1 day ago

Winners revealed for £150m fire safety framework

New deal will help organisations comply with the Building Safety Act
12 hours ago

Sellar plans £500m City tower next to Walkie-Talkie

Consultation starts on London 60 Gracechurch Street tower
2 days ago

Severfield ends year on high with record order book

Orders top £500m with strong future pipeline of opportunities ahead
2 days ago

Second senior director exits National Highways

Commercial director Malcolm Dare set to move on to new role
2 days ago

New scheme fuels London lab building boom

Plans in for 160,000 sq ft Whitechapel scheme near Royal London hospital
2 days ago

Contract race starts for next £155m section of A9 dualling

Prior Information Notice published for Tay Crossing to Ballinluig stretch
2 days ago

£55m Sheffield build-to-rent scheme approved

Demolition to start later this year for 158-flat Sheffield Garden project
2 days ago

London back as most expensive place to build in world

Capital leapfrogs Geneva to top costliest construction rankings
2 days ago

Gas supplier Regent to buy TClarke for £90m

£491m turnover listed building services specialist to be sold
3 days ago

Steel contractor Billington launches into bridge market

Steelwork firm hires staff from failed architectural and bridge specialist SH Structures
2 days ago

McGee employees benefit from rise in profits

Pre-tax profit doubles boosting payouts for Employee Ownership Trust
3 days ago

Lendlease veteran is latest new McAlpine director

Paul Sims joins as Operations Director after 40 years at rival contractor
3 days ago

Costain signs site labour supply deal with four firms

Contractor to use only a quartet of providers for temporary labour supply
3 days ago

BAM go-ahead for Leeds 200,000 sq ft office

Latitude Yellow will complete final plot at Doncaster Monk Bridge site
3 days ago

VolkerFitzpatrick wins £30m logistics job

Latest deal to build five distribution units for Prologis UK
3 days ago

Trio win new Scape utilities consultancy framework

Perfect Circle, AtkinsRéalis and Arcadis win places on
3 days ago

Precast firm FP McCann cleared after immigration raid

Home Office takes no action after public raid on construction site
4 days ago

Wates-owned SES restructure delivers record profit and revenue

Building services contractor revenue soars to almost £300m
3 days ago

25 groundworks firms win £100m Places for People deal

M&J Evans, Carmac and Churngold Construction feature in housing association's line-up
4 days ago

Energy efficiency firms angry at lack of CITB support

SME contractors funding bid "does not meet the current criteria for supporting productivity or EDI"
4 days ago

£400m South Cambridge science park approved

Outline approval allows former sewage treatment works to be demolished
4 days ago

McLaren gets green light for 45-storey Leeds tower

Landmark Wellington Square scheme will see 464 flats built with 360,000 sq ft of offices
7 days ago

Heavy rain causes 1.9% construction output fall

Hopes remain undampened of a resi-led recovery this summer
7 days ago

Contractor services