‘Strong construction’ statistics at odds with ONS findings

Divergence between figures raises 'considerable doubts' about the accuracy of official construction data

Thousands of construction workers on an industry “blacklist” will be offered between £1,000 and £100,000 in compensation (Getty)

The latest survey snapshot of the construction sector showed Britain’s builders are in decent health, a significant divergence from the contraction painted by the most recent figures from the Office for National Statistics.

The Markit/Cips Purchasing Managers’ Index for construction in October showed a reading of 58.8, well above the 50 mark that separates expansion from contraction.

The reading was down from the 59.9 recorded in September, but still indicated strong growth from the sector that accounts for about 6 per cent of the UK’s GDP.

By contrast the latest GDP estimate from the Office for National Statistics showed that construction output shrank by 2.2 per cent in the three months to September.

Howard Archer of IHS Global Insight said the divergence between the two sets of figures raised “considerable doubts” about the accuracy of the official construction data. He noted that the data collected by Bank of England regional agents on construction also suggested strength, rather than weakness.

“The sector remains in rude health,” Tim Moore of Markit said. “Rather than acting as a drag on the economy, as suggested by recent GDP estimates, the sector is continuing to act as an important driving force behind the ongoing UK economic upturn.”

The PMI survey found expansion across the three main construction sectors of housing, commercial building and civil engineering. Commercial building work increased at its most rapid pace for eight months. Job creation grew at its fastest pace in almost a year.

The ONS had been due to release a report comparing their own figures and those of Markit on 11 September, but this had to be cancelled for “operational reasons”.

Mark Robinson, the chief executive of the Scape Group, the public-sector procurement specialist, said construction had “great growth prospects” due to the Government’s goal of kick-starting private infrastructure plans.

But he added that the sector faced capacity constraints. “Much of the skilled workforce is due to retire in the next five to 10 years and if we can’t train enough new talent to replace them, the construction industry will struggle to deliver the new homes and infrastructure that both the community and the economy badly needs.”