Builders mark time but boost seen ahead

Britain’s building industry stagnated in May but should still boost the wider economy in the second quarter, experts said today.

Output was flat against April and down 4.8% year on year, the Office for National Statistics said, as Government initiatives like Help To Buy failed to make an early impact on the construction industry.

The news comes after the industrial sector stagnated in May, with a manufacturing downturn ending a strong recent run of economic data. However, economists expect overall growth to accelerate to about 0.6% between April and June.

IHS Global Insight’s Howard Archer said: “Even if construction output was only flat month-on-month in June, it would have still expanded by 2.2% in the second quarter. This would translate into a positive contribution of 0.15 percentage point to quarter-on-quarter GDP. The latest survey evidence from the purchasing managers suggests that construction output expanded modestly in June.”