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UK construction: new home contracts at highest level since 2008

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World Cement,

Figures released by Barbour ABI reveal that the number of contracts for new homes increased for the sixth consecutive month in October and are at the highest level since 2008. According to the data, the total number of contracts for new homes awarded in October increased by 9.2% from the month before and by 34.2% compared to October 2013.

While the number of residential units continues to increase, contract values fell slightly in October, with values 0.6% down on September and 6.2% lower than the same month last year. According to industry experts, this may be an indication that the recent boom in house building is beginning to spread to other parts of the UK, as opposed to a concentration in London where values tend to be higher.

“With rumours of a cooling housing market, it’s encouraging to see the residential sector still performing strongly in October, accounting for a third (30%) of the total value of contracts awarded,” said Michael Dall, Lead Economist at Barbour ABI. “The fact that the number of units is on the increase but values aren’t shouldn’t prove too concerning for the industry, as this is more than likely due to a wider geographic spread of house building contracts to areas such as the South West (13.9%) and South East (13.2%).”

“After its recent sluggish performance, it’s also positive to see the infrastructure sector featuring prominently this month with 22% of the total value of all projects. With the sector showing growth in the latest ONS Construction Output figures, perhaps this is evidence of projects in the pipeline beginning to translate into activity on the ground,” Dall added.

The report also showed that the UK witnessed an overall increase in construction levels in October with the value of new contracts awarded worth £6 billion. This is a 5.9% increase from September and 6.1% higher than the value recorded in October 2013, an indication of further growth in the fourth quarter.

Adapted from press release by Rosalie Starling

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