Government admits construction stats wrong

Grant Prior 13 years ago

Government number crunchers have admitted they over-estimated the construction recovery.

The Office for National Statistics revised its numbers today and admitted the construction industry grew less than previously thought in the three months to June.

The ONS said construction output rose 6.8% in the second quarter from the first three months of 2010 – down from the 9.6% it estimated before.

The revision for the sector, which accounts for 6.3% of all UK output, could shave 0.2% off the second quarter GDP growth number of 1.2%.

The backtrack came as materials producers cast doubt on Goverment construction output figures after sales of aggregates, asphalt, cement and ready mixed concrete remained sluggish.

Material sales improved in the third quarter of 2010 compared with the same period in 2009.

Aggregates, cement and ready mixed concrete were 3%, 9% and 6% higher respectively than last year. But 2009 was a historic low point so any uplift must be regarded as a comparative improvement as opposed to a sustained recovery.

The Government had published data indicating that construction output increased by 10% in the second quarter and a further 4% in the third quarter, underpinning the stronger than expected GDP growth figures of 1.2% and 0.8% recorded in the second and third quarters.

These official figures indicate that the level of construction output in the UK is now at an all time high but the Mineral Products Association said “nothing could be further from the truth. ”

MPA Executive Director, Simon van der Byl, said, “Everyone needs to take great care in interpreting construction related data for 2010 to date.

“Firstly the figures only reflect a welcome comparative improvement and secondly the 21% cut in public investment set out in the Comprehensive Spending Review will mean substantial reductions in construction sectors such as health education and roads and will put huge pressure on local authority spending.

“These negative pressures are likely to outweigh what will probably be a slow and uneven recovery in housing, commercial and other private sector construction over the next two years.

“In the longer term the private sector and infrastructure projects should deliver strong construction growth, but prospects for 2011 look very depressed.

“The possibility that many construction materials sectors and construction in total may experience a double dip recession during 2011 and beyond cannot be ruled out.”

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