Rebound in construction falls short of forecasts

Construction sector bounce back wasn't as strong as predicted. Picture: TSPL

Construction sector bounce back wasn't as strong as predicted. Picture: TSPL

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ACTIVITY in the UK’s construction sector grew last month, but the rebound from a sharp slump in August was not as strong as predicted.

The Office for National Statistics (ONS) said yesterday that output rose 1.8 per cent month-on-month in September. This compared with the previous month’s 3 per cent slide but the increase was about half of what economists had forecast.

Markit chief economist Chris Williamson said the industry had enjoyed “healthy” growth of 0.8 per cent for the third quarter, but expansion is expected to cool over the coming months.

He said: “The housing market has slowed since earlier in the year, most likely due to a combination of factors which include the tightening of lending rules, house buyers’ worries about future interest rate hikes and house prices simply being historically high.”

Earlier this week, the Council of Mortgage Lenders reported the second consecutive month of weaker lending to first-time buyers and home movers in September. Its director-general, Paul Smee, added that fears of the housing market becoming over-heated were now “dissipating”.

Allan Callaghan, managing director of Cambuslang-based Cruden Building & Renewals, said: “The release of the [ONS] stats coincides with a particularly buoyant time within the sector as companies the length and breadth of Scotland rebound from the downturn, win new contracts, deliver on time and within budget – and importantly recruit time-served staff and new apprentices. For this to become palpable it is important that this recovery is controlled and sustainable.”

He added: “Our order book is healthy, our staff numbers are growing, and we plan to press forward with the recruitment of 14-16 new apprentices in 2015.”

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