Construction output has hit its lowest ebb for many months as an uncertain economy, political paralysis and wintery weather all conspire against the building industry.
Construction output decreased by 2.3% in October 2019 according to ONS data, the largest monthly fall since January 2018 when it fell by 2.6%. It is now at its lowest level since April 2018, when output was £13,180mn.
Few sectors saw any new work coming their way at the beginning of Autumn, with private new housing and infrastructure posting alarming falls. Overall, new work was dragged down by private new housing and infrastructure, which fell by 4.7% and 6.3% respectively.
There was a small rise in public new housing, which was outweighed by a decrease in private new housing. So, overall, total new housing fell by £84 million – the largest decline since June 2018 when it fell £113 million.
Neil Knight, business development director, Spicerhaart Part-Exchange & Assisted Move, said: “October’s construction output figures suggest that new private housing is showing signs of tailing off, and while public housing compensates for this, these figures make slightly uncomfortable reading.
“This does not reflect our experience on the ground as we are seeing plenty of new developments, but it does underline that there is much more for the new government – whoever is elected on Thursday – to do to get the market moving again.
“The longer-term figures suggest the market is fairly flat overall and we are all going to have to wait a bit longer to see a fully-fledged recovery. Hopefully with the election out of the way in a few days’ time, we can all get back to something like normality again and that will restore confidence.”
The weather may have also played a part. The ONS noted that the decline in October 2019 may have been affected by adverse weather; “we received some anecdotal information from a number of survey respondents regarding the effect of this on their businesses, although it is difficult to quantify the exact impact on the industry,” it said.
However, what is certain is that output has been hampered since the June 2016 Referendum, and only political clarity can restore it.
Mark Robinson, Scape Group chief executive, said: “October marked another dreary month for the construction industry as it experienced the largest monthly fall in growth in almost two years and total output fell by a very significant £309 million.
“The industry has been spiralling towards a recession since the Brexit vote and it can only take so much more bad news. A lack of clarity over immigration and trade policies, as well as ongoing economic uncertainty, has forced construction bosses across the country to pause existing projects and hold off on making decisions on new work, which is evident through the large falls in repairs and maintenance, infrastructure projects and private housebuilding revealed today.
“However, the General Election outcome does have the potential to create a bounce back in activity in the New Year, so the industry will be holding its breath for a new government which has a clear mandate to implement a fiscal strategy and one that can make clear and concise decisions that will provide clients and construction firms with the confidence to press ahead with projects. However, on the flip side, a hung parliament could send the industry into further instability and disarray.”
