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Business News

George Osborne's boost 'has put a spring in builders' steps'

Builders were weighed down by the wintry weather in March but the Chancellor's Budget efforts to kick-start house construction have lifted spirits, the latest snapshot of the industry's fortunes said yesterday.

Construction, which accounts for about 7 per cent of the economy, remains stuck in recession territory, according to the Chartered Institute of Purchasing & Supply's latest survey. Activity declined at a marginally slower pace than February, but still looks like dragging on GDP in the opening quarter of 2013.

Civil engineering was worst hit as firms shed jobs but housebuilding enjoyed modest growth for the first time since May last year, and confidence is at its highest for 11 months. The Chancellor has gambled on a revival of the housing market with a major programme of shared equity loans and mortgage guarantees as the centrepiece of his Budget a fortnight ago.

David Noble, the chief executive of Cips, said building "seems to have a spring in its step". He added: "Whether this is a reaction to the Government's efforts to rejuvenate construction or simply an acknowledgement that things could not have been much worse than in February, we will have to wait and see."

Blerina Uruci, an economist at Barclays, added that the Help to Buy scheme "could provide some support for the struggling sector in the coming months", particularly the equity loans targeting new-build homes.