British construction output volume fell 0.5 per cent in the second quarter of this year, official data showed today, prompting speculation about a possible upward revision to GDP in the quarter.
That is an improvement on the estimated 2.2 per cent decline in construction output recorded in last week's GDP data, which showed the economy shrank by an upwardly revised 0.7 per cent.
However, that reading was based on estimates and statisticians cautioned there could be another revision at the next estimate of GDP.
Moreover, the small contribution of the construction sector to economic output - around 6 per cent - meant any revision was likely to be small.
Still, analysts reckoned Friday's data suggested an upward revision to Q2 GDP to around -0.6 per cent when the next revision is published later this month.
"If the latest numbers are accurate it does suggest that the economy was close to flattening out between April and June and in all likelihood make it a bit more certain we're going to see the economy come out of recession in the third quarter," said Philip Shaw, economist at Investec.
Shaw reckons the data could lead to an upward revision to second quarter GDP of 0.1 to 0.2 per centage points on second-quarter GDP if all other components are kept the same.
Construction output in the first three months of this year fell 8 per cent compared with the previous quarter.
A dramatic revision to that data earlier this year was one of the reasons why GDP in the first three months of this year was downgraded to show a fall of 2.4 per cent. Friday's figures showed new private housing work was 3 per cent down on the quarter, public housing work was 3 per cent up on the quarter.
Reuters