The Office for
National Statistics (ONS) released the latest data on construction output for
November 2019.
Official figures
from the ONS show that construction output increased by 1.1% in the last three
months to November 2019.
Monthly construction
output increased by 1.9% - the highest monthly growth since January 2019. Since
October, construction output has partially recovered from the 2.2% fall that
was reported at the end of last year. Firms across the UK experienced adverse
weather in October which slowed progress. We have therefore seen a pick-up in
November’s output for the industry, which had to make up for delays in work
from October.
Growth for November
was predominately driven by new work (2.4%) as well as repair and maintenance
(0.9%). Growth slowed for both public new housing (from 4.4% to 1.0%) and
infrastructure work (from -6.0% to -0.4%), but this is still positive compared
to the previous month.
In addition to the
ONS figures, the Department for Business, Energy and Industrial Strategy (BEIS)
and Glenigan published their construction figures for November. General
consensus suggests that the construction industry’s output has slowed over the
past year compared to November 2018.
BEIS reported a 9.3%
decrease in brick deliveries and 8.9% decrease in concrete block deliveries in
November 2019 compared to the previous year, seasonally adjusted. The material
price index of “All Work” decreased by 0.6% in November 2019 compared to the
same month the previous year as well.
On 7 January,
Glenigan published their latest index of construction activity in the UK on the
three months to December 2019. Compared to 2018, new project starts were 19%
lower, residential starts were 27% down and non-residential projects were 12%
lower. The snap election temporarily disrupted the flow and the value of work
starting on site during the final quarter of 2019 which fell 15% against the
previous quarter on a seasonally adjusted basis.
Caroline Gumble,
Chief Executive at the CIOB, commented: “Comparing these latest figures to
those in 2019, it is apparent that investment into new builds and refurbishment
has slowed.
"We believe
this is due to low business confidence leading to a reluctance to expand,
reduction in infrastructure investment and less long-term planning
commitments. This is yet more reason for government to heed calls to
focus on a pipeline of well-planned projects and support for sector jobs across
the UK.
"These should
be among the priorities for the new government for this important sector.”
The Chancellor must
use the upcoming Budget to slash the rate of VAT on repair and maintenance work
and to invest in the construction sector in order to maintain the industry’s
recovery, according to the Federation of Master Builders (FMB) in response to
the ONS construction output data.
Brian
Berry, Chief Executive of the FMB, said: “While 2019 was a year marked by
political and economic uncertainty, there does seem to be some small signs of
hope for the construction industry, with the largest monthly growth in the
industry seen in November since the start of the year. It is too soon to tell
whether this will be a longer term trend, as some sectors such as private house
building and repair and maintenance continue to see sluggish growth.
“The upcoming Budget
provides the perfect opportunity for the Government to help ensure this
positive trend at the end of 2019 continues into the new decade. In order to
help boost the industry, the Chancellor should prioritise cutting VAT on home
improvement works, so that tax isn’t a barrier to homeowners upgrading the
energy efficiency of their properties.
"The Government
should also use the Budget as an opportunity invest in construction skills to
help build the homes and infrastructure we need, and invest in planning
departments to ensure the planning system doesn’t act as a blockage to the
Government’s ambitious housing targets.”
