Building responds to financial injection

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Output from the UK’s construction sites rose more than first thought between April and June as Government schemes spurred on housebuilding.

The Office for National Statistics (ONS) said construction output increased 1.4 per cent on the first three months of the year – up from an initial estimate of 0.9 per cent – although it was still down 0.5 per cent on the second quarter of 2012 as the sector claws slowly out of its trough.

Experts said there was a slight chance the better-than-expected performance could see the ONS revise up its initial estimate of 0.6 per cent growth in gross domestic product (GDP) during the second quarter.

Private sector housebuilding surged 7.6 per cent higher from the weather-hit first quarter and was up 8.2 per cent on the second quarter of 2012, boosted by the state’s Help to Buy and Funding for Lending stimulus schemes.

Work on new social housing soared 12.8 per cent from the first quarter and rose 9.8 per cent on a year earlier.

The official figures also showed construction output dipped 0.7 per cent in June from May, but economists pointed out it followed a 5 per cent month-on-month jump in April.

Howard Archer, chief UK and European economist at IHS Global Insight, said it was “more good news for the UK economy”.

“The construction sector is seemingly increasingly shrugging off its long-term problems and now contributing to growth,” he said.

The UK’s construction sector weighed on growth for much of the downturn as the slack housing market and slumping spending saw building sites mothballed and thousands of workers laid off.

Its recovery was also hampered by freezing weather in the first three months of the year, which conspired to push construction output to a 12-year low.

But parts of the sector are recovering as Government schemes revive the housing market.