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The Office of National Statistics has revised the final quarter of 2011 growth figure down from -0.5% to -0.6%, providing a significant reminder of how important it is to ensure that economic conditions are conducive to growth. The revision also means that, even if the effects of the bad weather are removed, the economy still contacted by 0.1% rather than remaining static.
Such a revision will put pressure on the government to include a definitive plan for growth in the upcoming budget. However, despite a general consensus on the need for a ‘growth plan’ to be put in place, there is little consensus on the nature of that plan or the mechanisms most likely to deliver results.
ACE’s view is that tackling barriers to private investment in infrastructure is the most effective way to encourage sustainable, long-term growth. This will require boosting private sector confidence and addressing the uncertainty in the development consents system, among other actions.
Construction sector output is estimated to have fallen by 2.5% on the previous quarter, which compares to the preliminary estimated contraction of 3.3%. However, when compared with Q3 2010 there was still a significant change, given the positive growth of 3.8% reported for that quarter.
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