Concerns are being raised over a slowing in recovery. Latest figures from the ONS for Output in Construction May 2014, show output has fallen by 1.1% in May 2014 compared to April 2014. However the latest Economic & Construction Market Review released by Barbour ABI shows that the total value of all new construction contracts awarded in May 2014 increased by 5.3% compared to April 2014, but this remains 3.7% lower than in May 2013.
Despite this the Construction Products Association’s latest State of the Trade Survey shows that construction product manufactures have reported a fifth consecutive quarter of rising sales, and increased levels of optimism going forward into the future. And forecasts by Euroconstruct show European construction output is anticipated to increase 1.8 percent a year, in real terms, from 2014 to 2016.
The Nationwide House Price Index has reported house prices increased by 1.0% in June 2014, and have now passed far beyond their peak in 2007. Data shows London house prices are up 25% in a rise unequalled since 1987, something reflected by the ONS in their comparison of regional house price indices before and after the financial crisis. And Berkley are pushing forward to build out all sites with planning. At the end of June the Bank of England announced a mortgage cap to insure against a housing boom. The Halifax House Price Index has recorded a fall of 0.6% for house prices in June 2014. Rightmove also report a cooling in house prices, reporting prices in some areas especially in London may have hit an affordability cap.
Housing statistics on the supply of homes delivered by the Homes and Communities Agency have been released amid reports that millions live in overcrowded housing because of failure to build new homes. The government has released sixth monthly figures for the Help to Buy Scheme which reflects the growth we have seen in the housing sector. These figures show that in the first 14 months, up to 31 May 2014, 22,831 homes have been bought with the help of this scheme, which has increase by 11% from the total as of 30 April 2014.
Finally the recovery of the industry appears to be reaching the medium construction businesses outside housing, as the contractors Osbourne announce a 28% growth in turnover and a £5.2m of pre-tax profit in the year to 31 March 2014, after a loss the previous year. And Glenigan report a post-recession resurgence in hotel and leisure construction.