Once again we can report a positive outlook. The ONS has released its latest construction output figures for November 2013 . These figures show that estimated construction output in November 2013 fell by 4% when compared with October 2013. But, output is estimated to have risen by 2.2% in November 2013 when compared to November 2012, giving an overall picture of growth.
The Construction Products Association has released its latest forecasts for winter 2013/14. These show that construction output is expected to rise by 3.4% in 2014 and 5.2% in 2015. However many uncertainties remain, especially around the long-term sustainability of this recovery period; growth is still expected in 2016, but at a much slower pace.
Although housing remains a major contributor to growth, it is extending to other sectors, with the CPA expecting retail to grow by 2% in 2014 and then 5% in 2015. Factory activity is forecast to increase by 6% and warehouses by 10% this year.
The Nationwide House Price Index has reported that house prices increased by 1.4% in December 2013 and were 8.4% higher than December 2012. Despite house prices gaining momentum in the latter half of 2013, they are still around 5% lower than the peak in 2007, according to Nationwide. The Halifax House price Index shows the final 3 months of 2013 to be 1.9% higher than the preceding 3 months. And in the final 3 months of 2013 prices were 7.5% higher than the same quarter in 2012.
Growth in the industry is still being led by housing and Galliford Try have reported that that they are enjoying a strong start to 2014 and are expecting a record half year profit for the six months to 31 December 2013. Persimmon Homes announced they had a 16% increase in new house sales for 2013, which they mainly attribute to the government’s Help to Buy scheme.
Although the housing market is recovering from the recession, the National Housing Federation says that this emerging recovery may be distorted by a widening gap between supply and demand of housing. They are concerned that with house prices increasing, rents are also beginning to soar, causing many people to be locked out of home ownership in the future.
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