With winter fast approaching the growth of the construction industry seems to be slowing dramatically. The ONS Output in the Construction Industry figures for 2014 show output was estimated to have fallen by 3.9% in August 2014 compared with July 2014. Figures show that all new work in construction decreased by 4.8% overall, only public new housing showed growth. Private housing contributed the largest overall fall.
Glenigan index for October 2014, shows the underlying value of residential project starts has fallen by 6%, which is the first fall since April 2013, this despite the October 2014 index being 2% higher than a year ago.
On the other hand the Construction Products Association has released their latest State of the Trade Survey for Q3 2014. The survey is more positive as it shows there is still growth in the sales of UK construction products in Q3 2014. It shows that manufacturers have reported optimism going forward in 2014 and are anticipating domestic sales growth over the next quarter and the next year.
The Nationwide House Price Index has reported a fall of 0.2% in UK house prices for September 2014, with annual house price growth slowing to 9.4% from 11.0%. The Halifax House Price Index has reported house prices rose by 0.6% in September 2014, yet annual house price growth is now just 9.6%, a decline from July’s annual growth rate of 10.2%. In contrast Bellway have reported a 75% profit improvement.
To re-iterate a slowing in the growth of the construction industry the Markit/CIPS UK Construction Purchasing Managers’ Index increased slightly to 64.2 in September 2014 from 64.0 August 2014. This slight increase was led by housing activity being the fastest growing area of construction output; however the rate of its growth is now at its weakest since May 2014.