Construction growth continues despite challenging conditions

Latest News Mon, Jan 14, 2019 8:56 AM

Since the start of 2016, the overall trend of construction output has been of growth, with a period of decline recorded in the early months of 2018, according to the latest ONS survey.

Since April 2018, output has shown an upward trend with five out of the latest seven months experiencing growth in the monthly series.

The rolling three-month time series provides a more comprehensive picture of the underlying trends within the industry, compared with the more volatile monthly series.

The main points from the ONS were:

  • The three-month on three-month series for all work was up 2.1% for November 2018; this was driven by all new work, which increased by 3.4%, but was offset slightly by a decline in all repair and maintenance, which fell by 0.4%.
  • The increase in the all new work three-month on three-month series was driven primarily by private new housing and infrastructure which increased by 4.9% and 6.5% respectively.
  • Construction output recorded an all-time level high in November 2018 in the chained volume measure seasonally adjusted series; the month-on-month series grew by 0.6%, resulting in the total value of construction output exceeding £14 billion for the first time since monthly records began in 2010.
  • This was driven primarily by strong growth in private new housing, private commercial new work, and public housing repair and maintenance, which increased by 3.1%, 2.3%, and 5.8% respectively.
  • The main factors acting to depress growth were a steep decline in public other new work, down 5.8%, as well as a drop in infrastructure, which decreased by 2.5%.

Sarah McMonagle, Director of External Affairs at the FMB, said: “The UK construction sector grew by 2.1 per cent during September to November 2018 compared with the previous three months. This is despite unparalleled levels of political uncertainty around the very real prospect of a ‘no deal’ scenario.

"However, we are urging the Government not to allow these results to create a false sense of security. Since November, political uncertainty has cranked up and is increasing every day. A growing and prosperous construction sector will be a distant memory if the Government allows the UK to crash out of the EU without a deal in place.

“The construction industry is also extremely concerned about the Government’s proposed post-Brexit immigration system. In the Immigration White Paper, published at the end of last year, the Government revealed that they will make few allowances for low skilled workers to enter the UK post-Brexit.

"Most tradespeople will be defined as low skilled and therefore will not be permitted to enter the UK, regardless of whether they are from the EU or further afield. It is crucial that the Government introduces a post-Brexit immigration system that continues to allow us to draw on essential migrant workers or else their house building and infrastructure targets will be totally unachievable.”

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