UK Economic Growth and Construction Output Charts (June 2014)

We are back.

I would like to tell you how my hectic schedule has kept me from spending any time on this blog but unfortunately it is solely down to laziness. I will make a concerted effort to write more posts.

I was reading the BBC news website the other day and came across the article ‘UK economic growth revised up to 3.2%’.

http://www.bbc.co.uk/news/business-28800141

The article inspired me to whip up some visualisations of GDP and then, to make it even more interesting, compare it to construction output, particularly Infrastructure output.

The initial GDP estimate was revised up slightly from the provisional 3.1%. The construction sector performed slightly better than previously assumed.

The figures confirm the UK economy saw its best economic performance for six years and has passed its 2008 peak. Big milestone?

Construction was flat in the period but this was an improvement on the original estimate that it had contracted by 0.5%. On an annual basis construction was estimated to have expanded by 4.8%.

Construction accounts for 6.3% of economic activity in the UK.

Can you get a feel for the above statements from the below charts? How could we translate the above statements into an insightful visualisation?

This bit of work is pretty useless as a standalone piece. Future posts will start to examine the strength of relationships between variables so we can start to consider the meaning of patterns in data.

GDP charts

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Great British Period on Period Construction Output Falls for Fifth Consecutive Quarter

Figures released by the Office for National Statistics today show a fall in output in 7 of the 9 defined sectors. The largest fall being in the private commercial sector.

As the graphic below illustrates, the infrastructure sector has been one of the few growth areas over the past quarter although, output is still a way off the same period a year previous.

Here is a link to the ONS publication and dataset if you want more detail:

 PUBLICATION

http://www.ons.gov.uk/ons/rel/construction/output-in-the-construction-industry/september-and-q3-2012/stb-construction-output-2012-q3.html

DATA

http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-262512

 In other (equally dismal) news, my progress is slow with the construction share price data presentation and insight. I have a fully functioning spread sheet including charts, heat maps, interactive tables, etc. (which I use to aid trading decisions), yet its translation to the web is fraught with difficulty, mostly thanks to my lack of coding knowledge! I will persevere and hopefully it will be up within the next couple of months. In the meantime, I will start to post more regular Construction Company market insight and analysis in the form of charts and commentary which will become more interactive once I get the hang of this coding business.

UK Constuction Industry Market Analysis Sources

These headlines have become commonplace and reflect the current shabby state of the wider economy and the sentiment of many construction firms. Indeed, many of us can feel the diminution of positive sentiment in our everyday roles but for many firms it seems to be business as usual. The turmoil of the economy means different things to different companies. For some it may even provide business opportunity. So how do we measure the economic health of the whole construction industry with any accuracy?

To answer my own question…..we use the best data available to us.

This post documents some of the sources of data that I use every week to keep track of construction industry trend and sentiment. Much like an investment analyst or trader tracks key data and news feeds relating to the wider economy, particular company performance, or a specific currency pair, I like to keep up to date on the economic health of the industry within which I practice the most. I don’t have multiple screens running stochastic simulations on construction indices but I do take the occasional look at some of data provided by the following sources.

As you will see, I have listed some pros and cons of each source and attempted to assign each a crude score. Comparison is a tricky one – each medium is very different and often serves a unique purpose (how do you compare the ONS to Construction News?) so I have scored them based on four common criteria in an attempt to demonstrate usefulness by highlighting strengths and weaknesses.

These are subjective views and comments are, of course, very welcome.

Structure of the UK Construction Industry – August 2012

It’s been a while since my last post- I have been wholly consumed with work and other obligatory life commitments, but a poor show none the less. So as some kind of recompense, I thought I would take a look at some of the most recently published ONS construction data in some detail and upload some interesting charts.

The rather messy charts below (click on it to enlarge) represent data from the ONS Construction Statistics No. 13, 2012 Edition published 24th August 2012. Let’s start by looking at a snapshot of our industry constituents – total firms by trade and civil engineering firms (the field I work in most) in more detail…..

UK Construction Industry Structure 08/2012

UK Construction Industry Structure 08/2012

It would be interesting to visualise how the industry has changed shape over the years but having read some of the background information, it would seem that any shift would merely represent changes in the registers (the Builders Address File (BAF) pre 2010 and the Inter-Departmental Business Register (IDBR) from 2010). It should also be noted that the size of firms will not be entirely accurate – ‘firms’ are recognised as ‘reporting units’ so larger companies may report through a plethora of separate operating companies/regional units/divisions/etc.

The moral of the story…..don’t take all data and statistics at face value, especially summary headlines – context is everything.

Next post I’ll do a summary of the most useful construction industry indicators that I personally use on a monthly basis. Something to look forward to right?! I will try to provide some more interesting visualisations too!

Construction Trade Survey Q2 2012

The latest Construction Trade Survey, published today, makes for bleak reading. The survey reports an industry wide decline across all measures including construction workloads, new orders and tender prices.

A good summary of the latest publication can be found on the Construction Index via the link below:

http://www.theconstructionindex.co.uk/news/view/no-olympic-feelgood-factor-for-construction

These results reiterate the sentiment of recent publications such as Volume of Construction Output and GDP collated by the ONS. Increasing pressure is being applied to the government to ‘enable’ more publically funded construction starts to inject some much-needed stimulus into our dwindling sector andthe UK economy.

GDP & Construction Output (Q2 2012)

National output shrank by -0.70% during Q2 of 2012 according to seasonally adjusted, provisional figures published by the ONS this week.

 Not a huge surprise given the lack of growth over the last 3 quarters, and the awful weather, but what about the relationship between construction and GDP………here is what the ONS say:

 ‘The seasonally adjusted index of construction output decreased by 5.2 per cent in Q2 2012, following a decrease of 4.9 per cent in the previous quarter. Construction output decreased by 9.7 per cent between Q2 2011 and Q2 2012.’

GDP & Construction Output

GDP & Construction Output

Although we saw weakness in the production and services sectors, the biggest contribution to the shrinking national output appears to be construction (or lack of it) in particular the anticipated decrease in publically funded work coupled with a lack of notable recovery in the private sector (which we hoped would help to bolster overall construction output while the public sector spending dwindle continues).

 The bleak trend was reiterated by The Construction Products Association (CPA) who have downgraded forecasts for the UK construction industry from their spring update; now forecasting a contraction in volume of -4.50% this year and -1.30% in 2013 with recovery starting in the early part of 2014 thanks in part to likely rejuvenation of public sector capital budgets.

Volume of Construction Output – May 2012

In constant (2005) prices, non-seasonally adjusted, the recent ONS release shows the total volume of construction output fell 6.30% from £8,876m to £8,317m in May 2012 compared with the May 2011.

 The decline is driven by a decrease in new public work specifically:

  •  the volume of new public housing work decreased by 22.9%
  • the volume of new public non-housing (excluding infrastructure) decreased by 21.5%
  • the volume of new infrastructure decreased by 21.3%
Analysis in Brief

Analysis in Brief

Volume of construction output was sighted as a key contributor to the UK’s re-entry into double-dip recession and given the output in May this trend looks set to continue although we must keep in mind that figures are not seasonally adjusted so the impression made by the Queens Jubilee is not taken into account. 

There may however, be some much needed light at the end of the tunnel ; after months of pronouncements of intent to boost construction starts and thus the UK economy, the government has this week announced they will use their strong credit position to guarantee £40 billion of eligible projects from the National Infrastructure Plan before 2015. The announcement seems to have been welcomed by industry leaders although the right funding model will be crucial……we await the birth of the ‘son of PFI’!