The latest data from the Office for National Statistics gave the UK economy a much need shot in the arm as it said construction activity in the country jumped by 8.3% in October.
Overall the construction sector grew by 0.7% in the three months to October. The construction data has prompted economists to suggest that construction will be a big help to the nation’s economic recovery and following other good news the Pound is set to make gains.
Data released on Friday showed that Britian was the only major EU nation to report a rise in the number of new car registrations in November. Employment figures released earlier in the week also showed an improving situation one that has taken economists by surprise. Last week, official government forecasts pointed to a fourth-quarter contraction in GDP. But, Alan Clarke, an economist at Scotiabank, thought Friday’s data suggested GDP could expand by 0.3pc in the fourth quarter, even if Britain’s dominant services sector posted flat output.
Howard Archer, chief European and UK economist at IHS Global Insight, added: “If the construction sector can make any positive contribution to GDP in the fourth quarter, it really would seem a bonus. While any growth in the construction sector would probably not be enough to stop a renewed dip in GDP in the fourth quarter, it would help to limit any decline. The key question going forward is will the construction sector see any significant improvement in its fortunes in 2013?” he said.”It certainly continues to face major headwinds, notably including reduced public investment and spending, an extended weak economy, a struggling housing sector, and problems in getting funding for large-scale projects.”
Despite this week’s improving set of data, construction output is still 9.7% lower this year than at the same period as in 2011 hinting that the UK still has a long way to go before it gets back up to strength.
The Pound to Euro exchange rate is currently trading at 1.2284
The Pound to US Dollar exchange rate is currently trading at 1.6141
The Pound to Australian Dollar exchange rate is currently trading at 1.5301
The Euro to US Dollar exchange rate is currently trading at 1.3136
The Euro to Pound exchange rate is currently trading at 0.8138
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