"A return to growth of the service sector in January greatly reduces the likelihood of the U.K. falling back into a "triple-dip" recession"
- Chris Williamson, chief economist at Markit
The U.K. construction firms finally bucked their industry's downward trend in the last three months of 2012, boosted by building of private homes and infrastructure work. The volume of construction output added 0.9% in the fourth quarter, reversing the 2.2% decline seen in the third quarter, a report by the Office for National Statistics showed Friday. The revision would most likely add 0.04 percentage point to GDP, which contracted by 0.3% in the last quarter. As the constructions sector accounts around 8.6% of the economy, better-than-expected reading is decreasing chances of another contraction. At the same time, building of new private housing surged 5.9%, while new infrastructure output increased 4.2%.
"With the manufacturing index also in expansion territory, despite bad weather having provided some disruption, it looks more likely that the U.K. will post a modestly positive GDP reading for the first quarter," said James Knightley, an economist at ING Bank NV in London.
"A return to growth of the service sector in January greatly reduces the likelihood of the U.K. falling back into a "triple-dip" recession," said Chris Williamson, chief economist at Markit.
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