Construction Sector Slows

The latest quarterly survey by the Office for National Statistics shows a fall of 0.6% since the last quarter and a fall of 1.8% compared with the same quarter last year. (Where the construction industry is defined as: construction and demolition work, civil engineering, new construction work, and repair and maintenance.)

This is a worrying reversal of the slight recovery that we saw immediately after the 2008 banking crisis and reflects the slow down in infrastructure projects and in home starts.

The exceptionally low level of Housing starts (a further fall of 9% from a very low base in March 2011) see details is contributing to the dangerous increase in rental prices that is occurring as a growing population, largely excluded from home ownership by mortgage constraints, now collides with a shortage of supply.

I am optimistic that we will shortly see results from the political pressure to deliver a Keynesian boost to the economy by investment in infrastructure as one of the few acceptable routes for delivering economic growth.