The ONS released its figures for Output in the Construction Industry May 2013 earlier this month, these figures show that total volume of construction output in May 2013 was 4.8% lower than in May 2012, with zero growth since April 2013. The Construction Products Association’s State of the Trade Survey 2013 Q2 shows that the sales of construction products recovered slightly during Q2 2013, after the Q1 slump due to the poor weather conditions. The FMB State of Trade Survey also reported rising activity in Q2, with increased optimism for the next three months. Much of this reported improvement is driven by housing and infrastructure development with no growth from any of the other sectors.
The Nationwide House Price Index has reported that house prices increased by 0.3% in June, making them 1.9% higher than June 2012. The Halifax House Price Index has also reported that house prices increased by 0.6% in June. Halifax have said that house prices in Q2 2013 were 2.1% higher than in Q1 2013. To reinforce indications that the housing sector is showing signs of recovery the National House-Building Council have announced that private sector housing registrations have reached a five year high, with nearly 14,000 homes being registered in May, the highest since 2008 when the economic downturn began. The challenge for housebuilders is knowing if this is a blip or a long term recovery.
Despite, or perhaps because of, the promising outlook for housing the government’s latest spending review included a cut in the capital spending budget for social housing. This means that the capital budget will fall 36% year on year until 2016. This reduction in capital spending on social housing will be partly offset by rises in rent.