UK, construction holds strong

Jun 03, 2003

03/06/2003 - As the difficult economic period continues in the UK (manufacturing output was up 0.3% in January against December but 0.1% down on the same month in 2002), the construction sector has maintained its strong results in spite of the concerns of some observers.

This is the picture that emerges from the report published in issue 88 of Clay Technology, the journal of the ICT (Institute of Clay Technology). In the three months November to January total new orders were up by 20% compared to the same period a year earlier According to the DTI (Department of Trade and Industry), public non-housing new orders more than doubled due to a large contract placed by the Ministry of Defence in January for the refurbishment and new building of military facilities.
Commercial new orders, in contrast, rose by just 3% in January while infrastructure orders were up by 2%. Public new housing orders rose by 15% on a year ago but private new housing orders increased by just 2% over this period. Industrial new orders on the other hand fell by 5%.

Total housing starts rose 3% compared to a year earlier. Private housing starts were up by 5% but social housing starts fell by 10%. Total housing completions were 8% higher with private completions the main driver behind this growth, up 10% over this period. The NHBC (National House-Building Council) reports a stronger rise in both private housing starts and completions. Housing applications were up by 10% in the three months to February against a year earlier and completions rose 20% over this period.
Construction activity grew again in February with the housing sector reporting the strongest growth and civil engineering reporting the weakest.

A considerable increase in new orders received by manufacturers was reported in February compared to both the previous month and a year earlier and an increased number of firms reported working at full capacity.
The DTI estimates brick delivery figures for the final quarter of 2002 to have been 3% up on a year earlier. This, combined with a poor January, left deliveries in the three months to January 2% down on a year earlier. Similarly concrete block deliveries fell by 1% over this period.

House prices

The volume of house sales in England and Wales were up by 3.5% compared to a year earlier with sales in the North West rising the most, by 12% on a year ago. The average price of a property rose by 22% over this period. In February the annual house price inflation figure was reported as being slightly higher at 24.8% but with prices rising just 0.4% during the month, the weakest monthly growth rate since October 2001.
The value of loans for house purchase increased by just 12%. In sharp contrast, the value of re-mortgaging (which accounts for 52% of all new home loans) continued to surge, being 71% higher in January than a year earlier.