Key Statistics: 11th December 2012

Construction

• Last Thursday’s Autumn statement brought mixed news; positively the Government unveiled a range of additional investment measures totalling over £5bn for the next spending review period, the package will boost a number of sectors of the construction industry, most notably infrastructure and education. See our Autumn Statement analysis for further details.
• Official statistics showed that new orders for the construction industry were 5.4% higher in the third quarter compared to the second. However despite the quarterly rise orders were 6.3% below the level recorded in the third quarter of last year. New orders for the private commercial sector continued to fall in the third quarter and worryingly were at the lowest real terms level since the end of the 1970’s.
• Construction activity as measured by the Markit/CIPS survey showed that the industry contracted again in November, the headline figure of 49.3 was below the crucial 50 mark that separates growth from decline and well below Octobers reading of 50.9. More worryingly the indicator of confidence over the next 12 months fell to a four year low, adding further evidence to the suggestion that triple dip recession is now a realistic possibility. 
• Official data showed that manufacturing output fell in October; it was 1.3% below the level of September and 2.1% below the level of October 2011.
• House prices as measured by the Halifax HPI were 0.7% lower in the three months to November compared to the previous three month period.

UK Economy

• Less positively the Autumn Statement highlighted larger concerns for the industry and the wider economy; the OBR revised down its estimate of growth for this year, saying they now think GDP will be -0.1% below 2011’s level, the growth forecast for 2013 was also revised downwards. The lack of growth in economy means the Government’s debt reduction target will also not be met and that an additional £105bn will need to be borrowed by 2016-17 than was previously thought needed. The OBR now thinks that national debt will peak in 2015-16 at 79.9% and will begin to fall thereafter. The news has raised fears that the UK’s credit rating is once again under threat.
• The UK’s trade deficit widened slightly in October to £3.6bn compared to £2.5bn in September, the large deficit in goods was offset somewhat by the surplus in services trade.