Sharp pick-up in UK construction amid rapid economic recovery


Britain’s construction sector has had its sharpest pick-up in activity since 2014 amid signs that the domestic economy is recovering more quickly than Brexit- and pandemic-affected trade flows, new figures have shown.

The latest snapshot of the construction sector, which accounts for around 6% of total UK output, pointed to an across-the-board increase in March, with house-building, commercial projects and infrastructure work all displaying strong growth.

Despite the Covid-19 lockdown the IHS Markit/CCips construction activity index registered 61.7 in March, up from 53.3 in February and well above the 50 level that marks whether the sector is expanding or contracting. The latest reading signalled the strongest rate of output growth since September 2014.

Tim Moore, economics director at IHS Markit, said: “March data revealed a surge in UK construction output as the recovery broadened out from house building to commercial work and civil engineering.

“Total activity expanded to the greatest extent for six-and-a-half years as residential spending remained robust, commercial projects restarted and infrastructure contract awards moved ahead.”

Meanwhile, France reported that a 4% increase in exports to the UK in February still left the country running at only 84% of the monthly average during the second half of 2020.

Britain is France’s fifth biggest export market and the value of the goods crossing the Channel dropped from €2.7bn (£2.3bn) to €2.1bn in January as red tape and tighter lockdown restrictions combined to choke off trade.

French imports from Britain jumped 27% to €1.5bn in February, returning to a level just shy of the monthly average during the second half of 2020.

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In March Britain delayed the introduction of a range of post-Brexit import checks on goods from the EU by around six months, saying businesses needed more time to prepare because of the impact of the pandemic.

The Office for National Statistics reported a 41% drop in UK exports to the EU in January and a 29% fall in imports, but said Covid-19 had made it difficult to quantify the impact of Brexit on trade. French restrictions have recently been tightened following a rise in Covid-19 cases.

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Fresh ONS data showed consumer spending on credit and debit cards picked up following the modest easing of lockdown measures at the end of March when people were allowed to meet in groups of six outside, and outdoor sports such as golf and tennis were permitted.

In the week to 1 April payments on cards were 88% of their pre-pandemic average, the highest level since the week before Christmas. The figures are not seasonally adjusted, and the ONS said some of the increase was driven by end-of-month spending on households bills and food shopping.

ONS figures next week will show whether the economy stabilised after a near3% drop in output in January, when all four nations of the UK went into lockdown.

Recent figures have suggested that businesses have found ways of operating despite restrictions and that the vaccination of more than half of UK adults has led to rising consumer confidence.



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