North West output growth ten times national average

11 October 2018 | By Neil Gerrard

The growth of construction output in the North West is ten times the national average.

That’s according to new figures from the Office of National Statistics (ONS) which recorded a rise in construction output of 15% in the region to more than £4.6bn in the three months to August 2018 compared to the same period last year.

Across Great Britain as a whole, seasonally adjusted output rose by 1.6% during the same period year on year. Output during the period compared the three months before increased by 2.9%, illustrating a weak start to the year caused in part by poor weather.

For Great Britain as a whole, repair and maintenance work rose by 2.8% compared to the three months prior, while public and private housing output was up 5.6%. Infrastructure rose by 4.7%.

Commenting on the increase in output in the North West, northern powerhouse minister Jake Berry said: “It’s wonderful to see how the Northern Powerhouse is driving investment in the North West and helping grow the construction industry to the tune of over £600 million.

“Anyone visiting the North West can see the huge number of construction projects underway and these figures show just how valuable they are.”

Blane Perrotton, managing director of the national property consultancy and surveyors Naismiths, commented: “Housebuilding doesn’t just have a totemic importance for the industry as a whole – it is also serving as a ‘get out of jail’ card. The £442 million boost it provided in the three months to August underpinned the recovery enjoyed by the industry as a whole.

“But the growth is far from evenly spread – with big regional disparities opening up as the confidence gap widens between the overheated South East and other areas where demand is stronger and margins better.

“Infrastructure too is helping keep builders busy, though the £232 million jump in output it provided was mostly focused on existing, long-term projects rather than new ones.

“Across the industry, numbers of new orders are modest at best – and weak at worst – as developers remain deeply wary of committing to new projects. The Brexit deadlock has choked investor appetite and the chances of the impasse ending before a deal is struck remain close to zero.”

Michael Thirkettle, chief executive of  construction consulting and design agency McBains, added: “These figures, which show a third successive increase in output, will be cautiously welcomed by the construction industry.

“We’re still not out of the woods however, with Brexit worries still on the horizon and the cost of imported materials remaining high due to the weak pound.  Before this recent upturn in output, we saw several months decline so evidence of sustained growth is needed before we can safely say we’re on the road to recovery.

“In particular, construction needs some incentives from the government to help give housebuilding a further boost.  We’re still building fewer homes than required.”

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