4% growth for a supposedly collapsing construction sector
October 26, 2010
Today’s preliminary growth estimates from the ONS are good news for anyone who thinks the coalition Government is on broadly the right track.
Just take a look at this chart:
It’s pretty clear that growth in all sectors is returning to trend, ameliorated in this quarter by anticipation of the Spending Review. I would predict weakened growth in the construction sector in Q4, because (a) it’s winter, and building things in icy conditions is difficult, (b) Government construction projects are now curtailed for a while, and yet (c) the infrastructure projects funded in the Spending Review will lend some confidence to the sector. I wish I actually had some money to invest in this sort of thing.
There’s still quite a way to go before it gets back to trend, so even weakened growth in construction will probably be around 2-3%. Regardless, it seems pretty clear that the possibility of a double dip recession is receding, and that our current economic strategy is the right one. I can only assume Alan Johnson is wailing and gnashing his teeth.