UK Q3 construction output rise to boost GDP

British construction output data for the third quarter has been revised up massively and could add 0.2 percentage points to the last published Q3 GDP estimate, the Office for National Statistics (ONS) said on Friday.

The revision will push the Q3 GDP figure close to parity and will be a boost for the Labour government which is forecasting a return to growth by the end of the year.

The ONS said construction output rose by 2 percent in the July-September period compared with an estimate for a 1.1 percent decline published in last week's second reading of Q3 GDP, which showed the economy shrank by 0.3 percent in the period.

An election must be held within the next six months and Labour, in power since 1997, is trailing the centre-right Conservatives, although recent surveys show the gap narrowing.

Conservative leader David Cameron taunted Prime Minister Gordon Brown in parliament this week over the fact that Britain was the last of the major economies to emerge from recession.

Britain is suffering its longest unbroken stretch of GDP declines since records began in 1955.

Economist Philip Shaw of Investec said that the Q3 GDP figure could improve further if the services sector element was revised upwards. The initial reading of GDP in October showed a 0.4 percent decline, shocking markets. "A wide range of anecdotal evidence suggests fairly strongly that ONS estimates of the services sector was too weak. Subsequent revisions will reveal the true state of play," he said.

The data published last week showed a 0.1 percent decline in total service industries activity on the previous quarter/

Setting out the construction data, the ONS said a rise in repair and maintenance of 10 percent was offset by a fall in new work of four percent.

The final reading of Q3 GDP will be published on Dec. 22.