Construction output shows signs of bounceback

Latest News Fri, Sep 9, 2016 3:23 PM

British construction output held steady during the first full month after the June vote to leave the European Union, bucking expectations for a fall, while the trade deficit narrowed slightly, official data showed on Friday.

Construction volumes were unchanged in July after a 1.0 percent drop in June, the Office for National Statistics said.

But compared with a year earlier, volumes were 1.5 percent lower, the biggest drop since April 2013 though a smaller decline than the 3.2 percent economists had forecast.

The figures are the first official numbers on Britain's construction industry, which makes up 6 percent of the economy. They follow a closely watched survey of purchasing managers which pointed to the steepest decline in seven years in July, before rebounding in August.

"Construction output remained steady in July with growth in infrastructure offset by falls in repair work and commercial buildings," ONS statistician Nick Vaughan said. "There was strong growth in construction orders, led by housing, after nearly two years of orders remaining relatively flat."

The ONS said there was very little anecdotal evidence that the vote to leave the EU had affected construction output.

Britain's economy has shown signs of weathering the initial shock of the vote to leave the EU better than many economists had feared, but the Bank of England still expects construction to be one of the hardest hit sectors.

ONS figures showed new construction orders in the three months to the end of June were 8.6 percent higher than the previous quarter, the biggest rise since the second quarter of 2013. Private housing was up 28.2 percent on the quarter, the sharpest jump since 2010.

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