ECONOMIC growth for the third quarter looks set to be revised upwards to 0.8 per cent after official figures showed the UK’s construction sector grew more quickly than previously thought.
The Office for National Statistics (ONS) said yesterday that construction output expanded by 1.6 per cent, double the original estimate of 0.8 per cent.
Chris Williamson, chief economist at Markit, said the scale of the revision meant third-quarter GDP is likely to have grown by 0.8 per cent, compared with the 0.7 per cent expansion reported last month. The ONS is due to publish its final estimate of economic growth for the period on 23 December.
Williamson added: “The upgraded performance of the construction sector brings the official data more into line with buoyant business survey evidence of a building sector boom this year, led by a surge in housebuilding.”
Allan Callaghan, managing director of Glasgow-based Cruden Building & Renewals, said: “The importance of construction, the fabric on which Scotland is built, must not be underestimated.
“So whilst it’s great to see the growth we are experiencing within the sector reflected in the national statistics – it’s important that we continue to build on that in the weeks, months and years to come.”
However, yesterday’s official figures also showed that the sector suffered a poor start to the fourth quarter, with an unexpected 2.2 per cent fall in output in October compared with the previous month. Year-on-year growth of 0.7 per cent was the weakest since May 2013.
Howard Archer, chief UK and European economist at IHS Global Insight, said the prospects still looked “relatively decent overall” for the sector, despite October’s surprise setback.
He said: “Housing market activity has slowed but should be relatively decent going forward with December’s reform in stamp duty providing support.
“Improving house building is particularly important given that a shortage of properties is a major factor repeatedly putting upward pressure on UK house prices.”
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