Key Statistics: 11th November 2013

Construction

·         Output in the construction industry in the third quarter of this year was 4.1% higher than during the third quarter of 2012. This was the second consecutive quarter of growth for the sector. The rise was driven by a 16% rise in private housing and a 13% rise in commercial output compared to a year before. However there were output declined by 4% of infrastructure, 2% of other public work and 12% of industrial output.

·         Statistics published by the Department for Business Innovation and Skills show that the trade deficit on construction materials widened by £68m to £1,676m in the second quarter of 2013, as the start of the construction recovery raised demand for imports. Annual construction material inflation rose to 1.1% in September.

·         London office development is at a four-year high according to Deloitte Real Estate’s London Office Crane Survey. 9.7 million sq ft of office space is currently under development in the capital, with over 2 million of that space already leased to tenants.

·         The latest Markit/CIPS Construction Purchasing Managers’ Index rose to 59.4 in October from 58.9 the month before. A figure above 50 indicates expansion and, taken with the strong survey findings from the previous three months, the survey results point to a sharp expansion in construction output during the third quarter and into the fourth quarter. All three broad areas of the construction sector recorded growth in business activity in October. Residential construction was the strongest performing of these sub-sectors, though expansion slipped slightly from last month’s peak. The survey indicated accelerating growth in commercial and civil engineering activity.

Economy

·         The National Institute of Economic and Social Research (NIESR) estimated that UK GDP grew by 0.7% in the three months to the end of October. This casts doubt on some of the bullish results from recent PMI surveys, which have implied growth rates of around 1.3%. NIESR forecast 1.4% GDP growth for 2013 and 2.0% growth in 2014.

·         The UK deficit on trade in goods in September was £9.8bn, its widest for almost a year ,as export volumes fell by 4.6% and imports rose by 1%, according to the ONS. Exports to countries outside the EU rose by £0.1bn but exports to the EU fell by £0.3bn. These figures are disappointing; it was hoped that a weakening of sterling during 2013 would help the UK’s export competitiveness and reduce the trade imbalance.

·         Job vacancies and starting salaries for permanent staff grew strongly in October, according to research by the Recruitment and Employment Federation and KPMG. The report warned of a skills shortage, echoing findings from the National Specialist Contractor’s Council that 21% of their members are reporting more difficulty recruiting skilled labour.