Business

Housebuilding boosts UK construction output

Building site in London Image copyright Getty Images

The UK's construction sector returned to growth in December, helped by a strong recovery in housebuilding.

Construction output rose 2% from the month before, official figures showed, having fallen 4% in November.

Private sector housebuilding rose 5.1% in December and was up 21.6% from a year earlier.

Construction output grew 0.2% in the final quarter of 2013, the Office for National Statistics said, against an earlier estimate of a 0.3% contraction.

The sector has now grown for three consecutive quarters for the first time since 2010, the ONS said.

The housing sector has been helped by government schemes aimed at helping people buying new homes and by record low interest rates.

"Improving housebuilding is particularly welcome news, given that a shortage of properties is a major factor, repeatedly putting upward pressure on UK house prices," said Howard Archer, chief UK and European economist at IHS Global Insight.

"Nevertheless, the fact remains that there needs to be extended, very strong housebuilding to make significant inroads into the problem."

For 2013 as a whole, construction output rose by 1.3%. However, despite the recent recovery in the sector, the ONS noted that "output in the construction industry remains well below the pre-downturn peak in 2007".

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