Incoming work into the construction sector is now stabilising
(19/01/2010)

According to the latest ONS data on new construction orders, orders in the three months to November 2009 rose by 1 per cent compared with the previous three month period. Orders in the 12 months to November 2009 fell by 14 per cent compared with the previous 12 months but orders in the three months to November 2009 rose by 4 per cent compared with the same period a year earlier. In the three months to November 2009, compared with the same period a year earlier, private housing orders rose by 23 per cent and public and housing association housing orders rose by 9 per cent.

Commenting on the ONS data, RICS chief economist Simon Rubinsohn says: "New construction orders data suggests that incoming work into the sector is now stabilising after the hefty falls of the past few years. One particularly encouraging aspect of the numbers is the continuing improvement in private housebuilding orders; in November they climbed to their highest level since May 2008. This is consistent with the better news from Barratt Developments who, while remaining generally cautious about the outlook, acknowledged that forward sales have significantly increased.

"The contribution of the acceleration of public spending programmes is evident in the data, whilst in contrast new private commercial and industrial work continues to languish. The key issue looking forward for the construction sector will be whether the private sector can take up the running as the public sector taps are turned off in an effort to rein in the huge budget deficit."