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Positive outlook for UK economy as construction sector grows

The UK construction sector is showing further signs of recovery, after data released by the Office of National Statistics showed output rose in the last quarter.

The ONS revealed construction output rose by 1.4% in the three months to the end of June, up from the previous estimate of 0.9%.

The data rounds off a week of positive economic news, with the UK goods trade deficit shrinking to its smallest level in almost a year, as more goods were sold abroad.

ONS figures also showed that manufacturing output rose in June at the strongest pace since the end of 2010.

Flora Lowther, head of research at jobs search engine Adzuna, commented: “The construction sector is a good barometer for economic growth. The industry has been slow to recover from the financial crisis, but now it’s showing symptoms of a robust rehabilitation. If you iron out monthly fluctuations, output is slowly building.”

Adzuna research found construction vacancies are being generated at five times the pace of total vacancies. The total number of advertised vacancies in the UK increased by just 2.5% in the year up to June, whereas the number of construction vacancies rose by 12%.

Flora continued: “With new work increasing, the sector is firing up for a period of increased activity. Employers are anticipating more business, and preparing by hiring new staff.”

The UK goods trade deficit stood at £8.1bn in June, down from £8.7bn in May. Over the three months to June, export volumes grew by 5.9% percent, almost twice as fast as the growth in imports.

The British Chambers of Commerce (BCC) said the fall in the trade gap was “welcome”, but added that the deficit was “still too large”.

“We aren’t making enough progress in rebalancing our economy towards net exports,” said David Kern, chief economist at the BCC.

This was posted in Bdaily's Members' News section by Graham Vincent .