The UK’s July construction activity saw a 2.2% increase since June showing signs of improvement than what was previously thought during the second quarter. New data that was released today shows that the UK’s economy is showing signs of edging out of the recession and also provides a modest outlook for the third quarter growth prospects.
The construction sector is still in the slump with declines of 10.1% in July which has been one of the key points that was weighing down on the UK’s economy since late last year. The new data released earlier today showed evidence of a moderate growth in the overall economic output in the current quarter with a less than previously estimated drop during the second quarter. The month of May, which saw a spike in output was due to the public holiday that was postponed to June adding an extra holiday besides the Queen’s celebrations.
The figures in July were slightly dented on account of the additional public holiday on account of the Queen’s celebrations and remained poor despite the Government’s best efforts to boost the construction sector. The biggest obstacle has been the cut in government spending and a weak economy. Also the housing sector in the UK which has been struggling added further to the problems with revised output showing a decline of 0.3% rather than the first estimate of 3.9% in Q2.
The economy has been tipped to show growth between the months of July and September wherein July has seen the industrial output grow at the fastest pace in 25 years. The revised construction data could mean that the GDP for the Q2 could well be revised from the 0.5% to 0.4%.
Adding to this, the revenue from ticket sales for the London Olympic and Paralympic games could also add another 0.2% growth to the GDP, QoQ estimated by the ONS.
To access the full release by the ONS on July’s Construction Output, click here.