A fall-off in refurb and maintenance work and new housing growth rates hit otherwise broadly improving output figures in July.

Overall construction recorded no growth during the month and just a 0.6% rise in the second quarter compared with the first three months of 2014.

But new work output continued to rise by 1% in July and 0.5% in Q2 compared to the start of the year.

The latest figures suggest the pace of construction growth is easing as housing starts show tentative signs of tailing off.

Private sector home building rose 1.1% on the month in July, down from 2% in June. The annual growth rate slowed to a five-month low of 16%.

New orders also published today for the second quarter were 3.8% higher than in Q1.

There were increases in infrastructure (20.8%), private commercial (9.6%), public new housing (7.3%).

But private new housing and private industrial orders fell by 6.3% and 1.9% respectively.
Stefan Friedhoff, Global Corporates managing director for construction at Lloyds Bank Commercial Banking, said: “The industry will take this data with a pinch of salt, particularly as other industry readings earlier in the month reported optimism among construction firms.

“As always, the reality is somewhere in between. There is undoubtedly a buoyancy in the industry rarely seen since the recession, but some factors are concerning.

“Demand is increasing but contractors are having to contend with cost inflation, labour shortages and a relentless pressure on their supply chains.

“Nevertheless, the moves toward consolidation among construction firms are evidence of an ever-more confident sector, albeit one where firms are looking to meet demands from clients and provide integrated solutions on increasingly complex projects.”