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New orders in the UK construction industry increase in 4Q12

World Cement,

The Office for National Statistics has released figures for new orders in the UK construction industry in 4Q12. Highlights from the report include:

  • Total volume of new construction orders was 3.4% higher than 3Q12 and 11.2% higher than 4Q11.
  • Estimated new orders for private housing increased by 10.3% q/q and by 10% y/y.
  • Estimated volume of public new housing rose by 9% q/q and 46.5% y/y.
  • Infrastructure was the only sector to experience a decline, with new order volumes dropping 15.4% compared to 3Q12.
  • Estimated volume of public non-housing (excluding infrastructure) rose by 9% q/q and by 24.8% y/y.
  • Estimated volume of private industrial orders was the highest since 4Q09. Orders grew by 9.6% from 3Q12 and 52.7% compared to 4Q11. 
  • Private commercial orders increased by 9.7% q/q and 13.6% y/y.

The Construction Products Association has pointed out that, while volumes of new orders remain low, 4Q12 was the second consecutive quarter to experience growth, a sign that things could be improving for the country’s construction industry.

Milja Keijonen, Economist at the Construction Products Association, stated: ‘Output in construction fell 8% in 2012 and so the second consecutive quarter of growth in new orders provides some much needed positive news for the industry. New orders are a forward-looking indicator and it will take around 12 – 18 months before the industry sees the benefits of this in construction output. Private housing has a much shorter time-lag between orders and output so the 10% growth in private housing new orders in Q4, compared to the previous quarter and year, should lead to a rise in output this year… It was extremely disappointing that infrastructure new orders fell 15% compared to the previous quarter, fell 13% compared to a year ago and were 29% below the pre-recession peak. Government announced £1.3 billion of capital investment to boost infrastructure in the Autumn Statement and it is essential that this is spent if the contraction in infrastructure is to be reversed.”

The need for investment has been echoed by Chief Executive of the Mineral Products Association, Nigel Jackson, who has called on the Government to accelerate investment in the 20 March Budget, especially in terms of local transport and road maintenance. Funding for such schemes was announced in the Autumn Statement, but Jackson urges that these be carried out this year and into 2014/15.

Edited from various sources by Louise Fordham.

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