THE double-dip recession may not be as deep as originally feared after figures showed a less severe decline in construction sector output than previously estimated.
Construction output between April and June fell by 3.9 per cent quarter-on-quarter, the Office for National Statistics (ONS) said, compared to a previous estimate of a 5.2 per cent decline.
While the decline still shows a struggling construction sector, with new infrastructure projects weighing most heavily on the industry, analysts said the figures could lead to an upward revision in total economic growth for the period.
Gross domestic product (GDP) shrank by 0.7 per cent in the second quarter, the first estimate from the ONS said, but this could be revised up to a decline of 0.5 per cent.
The hope has been that the construction sector will eventually benefit from various government measures aimed at boosting infrastructure and housebuilding.
The latest initiative has seen the government launch a scheme to underwrite risk on large infrastructure projects to allow work to go ahead on schemes that are stalled due to market conditions.
Graham Robinson, of law firm Pinsent Masons, said investing in construction is the best stimulus for economic growth.