UK Construction slowdown casts doubt on recovery

BRITAIN’S construction sector was given a “reality check” yesterday with the release of figures which also hinted at a slowdown in the wider economy.

Steve McGuckin of global construction consultancy Turner & Townsend, said the industry had had a 'reality check' Picture: TSPL

Official data showed that construction output fell in May as new work on private-sector housing dried up. It follows news of a steady rebound the month before.

The figures, from the Office for National Statistics (ONS), add to tentative evidence that the UK’s rapid economic recovery over the past year – which was initially driven by housing and consumer-facing sectors – may be cooling.

Steve McGuckin, UK managing director at global construction consultancy Turner & Townsend, said: “The surprise reversal of April’s growth comes as a timely reality check for the construction industry.

“Order books and levels of confidence are both strong, but despite the great progress 
made in the past year, no-one should take the momentum for granted.

“The construction industry is responding well to Britain’s urgent need for more homes, but its growth must become more broadly based if it is to ride out any bumps on the road ahead.”

Howard Archer, chief UK economist at forecasting consultancy IHS Global Insight, said there was now an “increasing risk” that economic growth slowed in the second quarter.

He said: “While construction output can be volatile from month to month, this is nevertheless another blow to second-quarter growth hopes following the news industrial production dipped in May. In addition, the trade deficit widened in May.”

The ONS data revealed that construction output dropped by 1.1 per cent in May after rising by 1.2 per cent in April, causing the annual rate of growth to slow to a six-month low of 3.5 per cent.