Key Statistics: 7 Oct 2014

Construction

• Construction output in September expanded at the fastest rate for eight months, according to the Markit/CIPS PMI survey. The reading of 64.2 was the second fastest reading in the last seven years. A quickening in the pace of growth in commercial and civil engineering work drove the index to its high level. Housing activity remains the fastest expanding area of construction according to the survey, but here the rate of expansion was at its weakest since May.
• Optimism among bosses of Scottish construction firms eased in Q3 2014, according to the latest quarterly survey by the Scottish Building Federation. 42% expect the next 12 months to be better for business than the last 12, while 20% expect things to get worse, giving a balance of +22. This is down from a balance of +39 in the second quarter of the year. The survey was conducted in the two weeks before the Scottish Independence referendum, and therefore this uncertainty may have dampened confidence. 

Economy

• UK labour productivity growth remains non-existent, according to the latest estimates from the ONS. In Q2 2014 output per hour worked was unchanged compared to the previous quarter and 0.3% lower than a year earlier. The UK has seen unusually weak levels of productivity growth during the downturn compared to other countries, and increasing productivity will be essential for real wages to recover.
• The latest round of Markit/CIPS PMI surveys showed sharply divergent trends between the UK’s services and manufacturing sectors. The Manufacturing PMI recorded a 17 month low of 51.6 (where 50 represents no change) with only weak increases in new business and export orders. By contrast the Services PMI recorded 58.7, with new business volumes and backlogs of work increasing strongly. Encouragingly, job creation continued across both sectors.
• Revised GDP estimates by the ONS show that GDP grew by 0.9% in the second quarter, up from 0.8% previously reported, while growth in the first quarter was revised down from 0.8% to 0.7%. Revisions to more historical data mean that the ONS now estimates that the UK surpassed its 2008 peak in the third quarter of last year; it was previously thought that this milestone was reached in the second quarter of 2014.