U.K. construction sectors ends 2016 on strong note, survey evidence for January remains disappointing

U.K. construction output rose 1.8 percent m/m in December after an upwardly revised gain of 0.4 percent m/m in November. The rise was mainly driven by house building and private commercial work, data released by the Office for National Statistics (ONS) showed Friday. 

On a year-on-year basis, the construction sector saw output grow 0.6 percent, compared with analysts' forecast for a 0.5 percent drop and an upwardly revised 1.8 percent increase recorded in November. Britain's construction sector ended 2016 on a positive note. The picture of weakness has been revised away in the construction sector. The quarterly outturn stood at 0.2 percent q/q.

Data released last week by Markit/CIPS UK showed Britain's construction sector fared slightly worse than expected in January. Markit/CIPS UK Construction Purchasing Managers' Index stood at 52.2 last month, compared with analysts' expectations for a 53.8 figure and with the 54.2 reading recorded in December.

"While the December rise in construction output was encouraging, January survey evidence from the purchasing managers was disappointing," said Howard Archer, chief UK and European economist at IHS Markit.