The latest ONS figures for total volume of new construction orders show that they have increased by 0.2% in Q2 of 2012 compared to Q1, this is 11.1% more than Q2 of 2011. Although the total volume of new construction orders has slightly increased over the first two quarters of the year Glenigan has reported that construction output has fallen by 3.9% over Q2 2012. This leaves construction output down by 8.6% compared to a year ago.
The Nationwide House Price Index has reported that house prices have rebounded slightly in August showing a 1.8% increase. According to Nationwide this brings the typical price of a house to £164,729. Whereas the Halifax House Price Index has reported that during August house prices fell by 0.4%. In addition to this the NHBC has shown some promising figures for private sector housing starts, as these are now 2% higher than last year.
Despite the recession not easing, some large companies are still announcing large profit increases such as Costain reporting a 52% pre-tax profit jump due to a strong performance in its infrastructure division. Also Lend Lease announced its European construction profits rose by 28%. However Laing O’Rourke, despite a recently announced 8% increase in revenue, reported a 20% drop in profits compared to last year.
Following David Cameron’s Government reshuffle there have been several changes that could affect the construction industry. Mark Prisk has replaced Grant Shapps as Housing Minister and Michael Fallon has become the new Construction Minister. Another new
appointment is Paul Deighton, currently Chief Executive of LOCOG who will join
the Treasury with responsibility for infrastructure development.
A positive announcement to come from the government is support for new housing in the form of £10 billion of underwritten loans to build homes for rent and £300 million of additional funding for 15,000 affordable homes. A new agency will be formed to broker the loans supported by the Homes & Communities Agency. There will also be an additional £280 million of funding for the FirstBuy scheme.