The ONS have released a statement defending their UK construction output data. The statement says that ONS figures were ‘the biggest and best measure of the UK construction sector’. This follows criticism for accuracy of their data by construction economists last month, due to the ONS figures suggesting the construction sector entered recession at the start of 2015.
The ONS have made upward revisions to their March UK construction output data, revisions show output for Q1 2015 contracted by -0.2% rather than -1.1% as previously reported, after an upward revision of 0.9%.
The ONS have also released their Output in the Construction Industry for April 2015 and New Orders Q1 2015, which includes a revised method as detailed in their Interim Solution for Construction Output Price Indices Quarter 1 2015. These April 2015 figures show output in the construction industry decreased by 0.8% compared with March 2015. This was made up partly by a decrease of 4.8% in repair and maintenance, with an increase in all new work of 1.6%. New orders for the construction industry Q1 2015 were estimated to have increased by 0.4% compared with Q4 2014 and by 8.0% compared with Q1 2014.
The Construction Products Association supports this month’s release of the ONS Construction Output Figures, as they welcome the new construction output price deflators implemented. The CPA say that the slight fall in April, as reported by the ONS, was expected due to the general election and its impacts on consumer and business confidence.
According to the latest figures from the Barbour ABI Economic & Construction Market Review, the value of construction projects awarded in April 2015 was £5.5bn, which is an 11% rise in the figure from April 2014. This rise gives cause for optimism as private housing continues to perform well, accounting for 67% of new contracts awarded.
The Markit/CIPS UK Construction PMI shows construction output growth rebounding for May 2015. The index registered at 55.9 for May 2015, up from 54.2 in April; however this is still the second lowest reading since June 2013. According to this month’s PMI, construction companies’ confidence regarding the outlook for the year ahead is at its highest level since February 2006, with 58% anticipating a rise in output levels and only 4% forecasting a reduction.
UK Construction PMI - May: 55.9
Nationwide House Price Index reports that in May 2015 house prices increased by 0.3%, with annual house price growth slowing to 4.6% down from 5.2% in April 2015. The Halifax House Price Index reports that in May 2015 prices decreased by 0.1%, with annual growth rising by just 0.1% from April 2015, and the quarterly rate of change falling for the second successive month.
The latest House Price Index from the ONS shows that house prices have increased in the UK by 9.6% over the past year up to March 2015. However the index also shows a wide variation in average house prices among UK regions and their rate of change, showing a clear north-south divide. The ONS have put together this infographic to show the changes in house prices for each region of the UK.
Source: Competitive Advantage Consultancy Ltd