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Searching for slivers of hope in the UK construction sector

Builders and construction professionals have been putting a premium on any glimmer of hope for the UK construction industry in recent years, which has struggled with the effect of the two recessions and international economic gloom.

New figures released by the Office for National Statistics (ONS) this week, however, have provided a welcome boost to the British building industry, showing that construction activity in the last quarter of 2012 saw a 0.9 per cent rise – much faster than the 0.3 per cent rise that preliminary calculations had predicted.

Figures such as these have offered slivers of ultimately false hope in the past, however, but Howard Archer, an economist at IHS Global Insight, told the Daily Telegraph that the figures could be taken as “modestly good news”, allowing the construction industry to have a good start to 2013.

He warned, however, that they were not a sign of an unequivocal upturn in the unsteady market and that the construction sector is “still struggling”.

“The construction sector will be fervently hoping that both the economy and the housing market see some improvement in 2013, even if only limited, and that this stimulates building work,” he told the newspaper. “The sector will also be hoping desperately that the government comes up with more support and initiatives to lift activity on top of the limited boost to capital spending and infrastructure projects provided in the Autumn Statement.”

One of the main factors behind the rise was a significant increase – of some 5.9 per cent – in the building of new private housing. Projects such as these are particularly good news for small and medium-sized construction businesses and independent traders. Smaller-scale operatives are often turned to fulfil contracts on smaller, local housing developments, which provide work for plumbers, window fitters, plasterers and increasingly, people with skills in the installation of domestic renewable energy systems.

Construction work on bigger-scale, new infrastructure projects grew by 4.2 per cent, which points to a more positive outlook for projects that can make a significant difference in boosting the wider UK economy.