Housing and infrastructure drag down construction output
In February 2017 construction output fell, decreasing by 1.7%, according to ONS statistics. The drop was driven by a fall in all new work, mainly as a result of a sizeable fall in infrastructure and a drop in housebuilding. “Rising material costs are likely to have played a very significant role in the decline,” said Mark Robinson, Scape Group Chief Executive. “Most recent government data reveals that 61.6% of the UK’s imported construction components and materials come from the EU, the costs of which are increasing at a rate not seen since the financial crisis. “This is a problem that is not likely to go away any time soon. With reports claiming that the UK economy has already peaked for the year, the pound is unlikely to be getting any stronger in the immediate term. “On top of this, the UK construction industry is walking on a tight rope between a skills gulf and a gender pay gap chasm. These recruitment problems on the ground need be addressed if we are to have a strong enough workforce, with the right skills, fit to deal with external pressures that are placed on the construction sector.” “The data does serve as a very real warning however, that as an industry we must be aware of the imminent threats to productivity and take action where we can.” After growing in January by 0.7%, all new work fell by 3.3% in February 2017. The fall in all new work was predominantly driven by the first month-on-month drop in infrastructure since October 2016, decreasing by 7.3%. This reverse from Januarys growth was driven by a drop in new housing, which fell for the second consecutive month by 2.6%, alongside the fifth consecutive month of negative growth in private industrial other new work, which decreased by 4.7%. Despite construction output falling month-on-month, on a rolling three-month time scale construction output grew by 1.5% in the past three months, driven mainly by strong growth of 2.2% in infrastructure and 0.6% growth in repair and maintenance. The large decline in all new work of 3.3% in February 2017 was driven by large falls in new housing and infrastructure. Infrastructure proved to be the most notable downward pressure on growth, decreasing by £113 million. Private housing provided a notable drag on output, falling by £66 million.

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