The ONS has announced that the UK moved out of recession in the third quarter, with GDP growing by 1% between quarter 2 and quarter 3. They have also released construction industry output data for September and Quarter 3 of 2012. This is not as promising, it shows that the total volume of construction output in quarter 3 of 2012 fell by 2.6% compared with quarter 2. The year-on-year comparison for the quarter shows this fell by 11.3% compared with quarter 3 of 2011.
Glenigan has also reported that new orders have continued to fall throughout October. Output is now at its lowest level since the second quarter of 1999, commenting on this Noble Francis of the CPA said “The private sector, which it was hoped would offset public sector falls and lead the construction recovery, is now also falling sharply, with the private commercial sector, the largest construction sector, 17.4% lower than it was one year ago.” This bleak view has been reflected by large companies such as, Hanson who announced that they will be cutting 250 jobs and closing plants in a major restructure.
If you really want to be depressed read Castles in the Air, a report published by RSA which says that Britain’s commercial real estate market will not return to pre-crisis levels until 2023, having experienced a staggering £13 billion drop in output values since 2007.
The Nationwide House Price Index reported that in October house prices rose by 0.6%. But this still leaves house prices 0.9% lower than a year ago. In contrast to this the Halifax House Price Index fell by 0.7%. According to Halifax this makes house prices in the three months to October 1.2% lower than in the preceding three months.
A more positive note is that the National Specialist Contractors Council released their state of trade survey at the end of October showing that 30% of firms have reported an increase in orders in quarter 3 of 2012, and specialist contractors are the most positive about their prospects for the next 12 months.
Nick Clegg announced that there will be £1 billion boost into the Regional Growth Fund which will help manufacturing firms, small businesses and local partnerships secure investment. It is to be hoped that this will take effect sooner than some of the government’s other initiatives.