Construction Output Grows but UK Experiences Biggest Quarterly Fall in Public Housing Orders since 1960s

The first quarter of 2014 saw the biggest fall in public housing orders since 1964, when records began.

New figures from the Office for National Statistics show that new orders for public housing fell by 45.7%, with the ONS speculating that private investment in housing associations is replacing public money.

During the three months, infrastructure investment fell by 16.5%, with private industrial spend down 14.6% and private commercial work down 1.9%.

For the month of April, however, overall construction output rose by 4.9% year-on-year, spurred on by private housing and industrial investment. Repair and maintenance also showed strong annualised growth of 4.2%.

Construction sector figures are regarded as key economic indicators with estimates widely used by economists and industry specialists as an aid to forecasting.

Construction output expanded by 1.2% in March 2014, having contracted in the two previous calendar months.

The government's Help to Buy Scheme could have had some role in the pickup, analysts say, but it will be unclear how much until the annual Affordable Housing statistics are released at the end of the year.

"Things are picking up after five years of no activity," Matthew Pointon, a housing analyst at Capital Economics tells IBTimes UK. "There's been a big surge in big demand. How much of that is down to Help to Buy is hard to decipher."

Pointon expects building to continue, but at a measured pace. Construction firms have scaled-back operations over the past five years and it will take time before there is capacity in the market to meet the demand.