Construction shows biggest growth spurt for 47 years

Output in the construction sector grew 6.6% between April and June 2010, according to the Office of National Statistics.

The boost is the sector’s highest three-month rise since 1963 and follows a 1.6% fall in output in the first three months of 2010.

Construction’s recovery helped the overall economy to record a 1.1% rise in the second quarter, almost twice the rate analysts expected and nearly four times the pace of growth in the first quarter.

However, economists are warning that this may be as good as it gets, with spending cuts likely to start to impact on the next set of quarterly figures.

Ian McCafferty, CBI chief economic adviser, said: “The second quarter will have been boosted by a sharp turn in the inventory cycle as firms have taken action to rebuild stocks, as well as strong growth in government expenditure.

“These two factors are likely to fade in the second half of the year, and we expect that growth will be more modest into 2011.”