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Construction sector enjoys growth

The construction sector enjoyed its fastest quarterly output rise in 37 years, official figures have revealed.

According to the Office of National Statistics between April and June output in the industry grew 6.6%, which is the highest three-month rise since 1963. It compares to a 1.6% fall in output in the first three months of the year.

The overall economy posted a 1.1% rise in the second quarter, as it was boosted by the recovery in construction. The GDP growth was nearly double what had been forecast and nearly quadruple the pace of growth in the first quarter.

As the spending cuts of the Conservative-Liberal Democrat coalition bite, economists have said the recent output improvements may be as good as it gets.

“The second quarter will have been boosted by a sharp turn in the inventory cycle as firms have taken action to rebuild stocks, as well as strong growth in government expenditure,” said CBI chief economic adviser Ian McCafferty

“These two factors are likely to fade in the second half of the year, and we expect that growth will be more modest into 2011.”

Readers' comments (1)

  • CHARLES ROBERTS

    "Fade in the second half of the year" and "more modest growth in 2011" ?

    Someone needs to get a dose of reality; after the current construction contracts are worked out, the construction industry will be decimated for the next four to five years on a scale which will make the early nineties look like a good time. There is no other way that the necessary cuts of 25% to 40% in government spending will be achieved.

    The legacy of 13 years of Gordon Brown will not lead to massive cuts in government employment, but will lead to massive cuts in capital expenditure and maintenance.

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