Construction pushes GDP figures

Output in the construction industry grew at its strongest pace since 1982, revised figures show.

The Office for National Statistics’ growth figures have recently been revised upwards. The gross domestic product (GDP) growth between April and June was originally a shocking 1.1%, which were double economists forecast.

However, the economy actually grew at a faster pace. Revised figures show a nine-year high of 1.2% growth, which is claimed to be led by the construction industry, which accounts for 6% of GDP.

As reported by the ONS, the construction industry jumped a colossal 8.5% which was revised upwards from the original 6.6%.

It has been claimed that the further increase in growth will add hopes for a solid economic recovery. But economists have warned that growth in the second quarter represents a peak in the rate of recovery and any further gains are unlikely.

Malcolm Barr at JP Morgan said construction could continue to boost overall growth, or at least not pull it down.

“After such a large gain in the second quarter, and with the government cancelling some spending on public infrastructure, it would be foolhardy to expect another large gain in the next quarter...we see little reason to expect construction output to emerge as a big drag on GDP in the next handful of quarters.”

A Treasury spokesman said:

“While the Government is cautiously optimistic about the path for the economy, the job is not yet done. The priority remains to implement the Budget policies which support economic rebalancing and help ensure the sustained growth that the Office for Budget Responsibility forecast this year and next.”