With summer coming to an end the recovery of the construction industry is continuing. The Construction Products Association released their latest State of the Trade Survey for Q2. The survey reports a continuing rise in construction activity with 41% of contractors reporting a rise in private housing output for Q2 compared to a year ago, and 37% of contractors in the commercial sector also enjoying a rise in commercial output in Q2 compared to a year ago. However rising costs are also a concern for the future and could hinder continuing growth.
In contrast The Glenigan Index reports just a two percentage increase for construction starts compared with this point a year ago. And regionally it sites a decline in project starts for Scotland, which it attributes to cautiousness around the Scottish referendum. Barbour ABI have issued a report called Scottish Construction – A Bright Future? warning over £7billion of planned construction works could be in jeopardy if Scotland votes to leave the United Kingdom.
The ONS has released its latest Output in the Construction Industry July 2014 figures, which state that output in the construction industry has showed continued year-on-year growth for the 14th consecutive month, with an increase of 2.6%, however this is at its weakest since November 2013. Yet this data also shows that new orders in the construction industry for Q2 2014 were estimated to be 3.8% higher than Q1 2014.
This reported growth is also supported by the latest economic and construction market review form Barbour ABI. This report shows that in July 2014 the number of construction projects in the UK increased by 9.8% in June 2014 and is now 19.1% higher than July 2013, with the majority of contracts awarded by value being in London and the South East.
The Nationwide House Price Index shows that house prices increased by 0.8% in August, with annual price growth rising from 10.6 to 11.0%. The Halifax House Price Index shows that house prices increased by 0.1% in August, which means that house prices in the 3 months to August were 3.0% higher than house prices in the 3 months to May.
With rising house prices slowing down compared to previous months Housebuilders profits certainly are not. Redrow have released their full year accounts to 30th July 2014, which shows a huge increase in pre-tax profit of 91% from £64.9 million a year ago. Redrow are also reporting an increase in turnover of 43% with a record turnover of £864.5 million, which they say is hailed to the impact of the governments help to buy scheme.