Revised ONS construction data could see third-quarter economic growth estimate raised to 0.9% next week
Stronger-than-expected output from Britain's builders means the pace of economic growth for July to September is likely to be revised up when the Office for National Statistics presents its latest estimates next week.
The ONS's monthly snapshot of the construction sector, based on a survey of 8,000 firms, showed that production was 5.3% higher in October than a year earlier, helped by strong growth in housing projects – which hit a 10-year high – and infrastructure.
Overall construction output rose by 2.2% in October alone, while private housebuilding was 19% higher than the same month last year.
Chris Williamson, of data provider Markit, said: "These data are encouraging in respect to the sustainability of the UK economic upturn, suggesting that recent developments have encouraged home builders to start more homes, boosting housing market supply to help meet buoyant demand, and that businesses are also feeling more confident to make investments in property and infrastructure."
Building output from earlier in 2013 was also revised up, and the ONS said: "Revisions to the quarterly data from the first quarter of 2012 would produce a revision of +0.1% to GDP in both the first quarter and third quarter of 2013." That would boost growth in the first quarter to 0.5%, and in the third quarter to a healthy 0.9%.
A Treasury spokesman said: "This is further evidence that Britain's economic plan is working, with new housing orders growing at the fastest rate in six years. The job is not done so the government will go on taking the difficult decisions needed to deliver a responsible recovery for all."
Construction was one of the hardest-hit sectors in the 2008-09 recession, which saw house prices fall rapidly, and building work has been slow to bounce back.
But with the housing market in many parts of the country showing signs of life, builders have been re-starting frozen projects. The ONS said new orders in the sector in the third quarter were 17.8% higher than a year earlier – though slightly below the level in the second quarter.
Howard Archer, of the consultancy Global Insight, said the strong level of new orders was good news. "Evidence that the construction sector is gaining momentum is obviously good news for fourth-quarter GDP growth prospects, although it needs to be remembered that the sector only accounts for 6.3% of national output."