Construction sector bounces back with modest growth

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The construction sector returned to modest growth in June after a slowdown over the previous two months, official figures show.

The Office for National Statistics (ONS) said the sector grew by 0.9 per cent on the previous month, below economists’ forecasts of a 2.2 per cent uplift, but a welcome bounce back from a one per cent contraction in May.

The ONS said: “Despite this increase the data for June 2015 continues a run of relatively weak monthly growth.”

It blamed an easing of housebuilding for the slowdown of construction growth.

Overall, for the second quarter of the year construction output rose by 0.2 per cent, compared with the first three months of the year, boosted by rises in infrastructure building and other public work.

The ONS added that the second quarter construction figure is higher than the flat output estimate it used to calculate gross domestic product (GDP) for the quarter last month.

But it added this small upward revision to construction did not point to any material revision to the ONS preliminary estimate of 0.7 per cent GDP growth in the second quarter of this year.

Construction output in June was 2.6 per cent higher year-on-year, below economists’ forecasts of a 3.3 per cent rise but still the fastest growth since March.

Construction makes up around six per cent of Britain’s economy, but the data is volatile, especially on a monthly basis, and can contribute to revisions to overall GDP.

Construction output fell sharply after the financial crisis and has been slow to recover.

The sector gained pace early last year but then weakened towards the end of last year as a temporary slowdown in the housing market reduced the building of new homes.

Meanwhile UK firms are increasingly confident about exporting goods and services, but are being hit by problems recruiting skilled staff, according to a new study.

The British Chambers of Commerce (BCC) said two thirds of exporters had difficulties hiring staff in recent months, the highest number since the end of 2013.

A survey of 2,000 firms by the BCC and DHL found that over a third expected to take on additional staff in the coming months amid increased confidence.