Construction output dips in March

In March 2017, construction output fell by 0.7% compared with February 2017, resulting in the third consecutive period of negative month-on-month growth.

Construction output in December 2016 reached a historic high. Therefore, although the subsequent months have decreased from that level, the three months to March 2017 have been stronger overall than the three months to December 2016.

The positive three-month-on-three-month growth in March 2017 results in the fifth consecutive period of growth in construction output, driven mainly by a rise of 0.4% in all new work; particularly in new housing. This growth was slightly offset by a 0.2% fall in repair and maintenance.

Housing continued to be the most notable increase within construction output month-on-month. Public housing increased sharply by 7.6%, resulting in an increase of £29 million. Despite private housing increasing at a relatively slower rate of 3.2%, in real terms it contributes more than two times that of public housing, increasing by £72 million. Aside from housing, the only other upward pressure on construction output came from private commercial work, which increased by £14 million in comparison with February 2017.

Mark Robinson, Scape Group Chief Executive, said, “It is worrying but not unsurprising to see construction output falling again on the month in March, as construction companies continue to feel the bite of rising material costs as a result of sterling’s depreciation and the spectre of Brexit negotiations continues to cause uncertainty within the industry.

“Clearly infrastructure is feeling the biggest brunt of this – experiencing the most notable downward pressure in March and down – 7.6% on the year. The next government must not let up on infrastructure spend, and in my eyes, manifesto pledges to get the regions building would be a real vote winner. The built environment – our schools, hospitals and community centres – are the cornerstones of British society, and investing in them will be held in high regard by voters.

“The newly elected metro mayors also hold a real opportunity to bolster economic growth. I urge them to stay true to their commitments and use their funding to improve local transport networks and housing – bolstering the Northern Powerhouse and Midlands Engine regions as well as our cities.”

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