Industrial Growth set to boost Demand in Property Sector

Posted on 13 May, 2015 by Kirsten Kennedy

Growth in the industrial sector has fallen somewhat since its stellar performance during 2014, with experts citing uncertainties due to the general election along with a drop in demand for Britain’s major exporters for the lull. However, the industry posted a surprisingly strong level of growth during March, leading many to believe that the recovery is beginning to solidify into a longer term norm.

Industrial Growth set to boost Demand in Property Sector

Although experts predicted a stagnation in March following growth of only 0.1 per cent in February, total industrial production climbed by 0.5 per cent in the 31 days to the end of the month. As a result, this boosted the total production output between the fourth quarter of 2014 and the first quarter of 2015 by 0.1 per cent – a relatively small, yet very solid, result.

Furthermore, when compared on a year on year basis, total production output rose by 0.7 per cent, with manufacturing output contributing a strong 1.1 per cent level of growth. However, manufacturing failed to meet February’s 0.5 per cent growth performance in the month, achieving growth of 0.4 per cent and highlighting the ongoing fluctuations in demand for the industrial sector’s largest category.

Capital Economics analyst Vicky Redwood states that the figures “tentatively suggest that the recovery in the sector is starting to get back on track.”

She continues; “It does suggest that the industrial sector may have turned the corner, no doubt helped by the lower oil price.”

While both total industry output and manufacturing production remain significantly lower than during their peak pre-crisis levels in 2008, the massive levels of investment seen in the industrial sector certainly indicate that firms and investors are retaining a certain degree of confidence in the strength of its recovery.

Analysts hypothesise that the hard data collected by the Office for National Statistics (ONS) is yet to truly reflect the key indicators of the stronger performance within the sector, meaning that a sudden spike in output and performance statistics may be on the cards as the year progresses.

These figures represent further good news for the commercial property market, as the unexpectedly strong performance signifies increased demand for industrial property. And with speculative development expanding throughout the UK, the latest growth in the sector suggests that this is a trend that is set to continue.




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