Latest ONS figures highlight “tough time for construction”

Allan Callaghan, managing director, Cruden Building

CONSTRUCTION output has continued its recent decline with its biggest month-on-year fall in five years; the latest figures from the ONS (Office of National Statistics) have shown.

Output continued its recent three-month on three-month decline, falling by 0.8% in February. This was driven predominantly by a continued decline in repair and maintenance work, which fell by 2.6% in the same month; construction output also declined by 1.6% month-on-month, stemming from a 9.4% decrease in new infrastructure work.

In comparison to February 2017, construction output fell 3% – the biggest month-on-year fall since March 2013.

The ONS said it had received anecdotal information from a small number of respondents regarding the effect of the heavy snow in late February, which may have been a contributing factor to the decline in construction output.

Allan Callaghan, managing director of Cruden Building commented on the results, “While I’m glad to report that Cruden is bucking marketing trends and performing strongly, it’s true to say that right now is a tough time for construction.

“With less than a year to go until Brexit, the twin pressures of rising material costs and a decreasing workforce are only being exacerbated. Although Cruden and many others in the Scottish construction industry have been working to plug the current skills gap for some time, the spectre of Brexit is casting a shadow of uncertainty over what it will mean for materials costs and the ability to retain skilled labour.

“We need decisive action from Government to secure trade and labour agreements that will support the construction industry in delivering on Scotland’s housebuilding and wider infrastructure targets.”

Gordon Reid, regional business development manager for Kier Construction Scotland said, “Heritage is a particular growth sector for Kier Construction Scotland. We have just been appointed as the contractor to support Glasgow Life in their refurbishment of The Burrell Collection. Returning iconic buildings to their former glory is hugely rewarding and provides plenty of opportunities to attract a diverse range of new talent to the industry.

“We will continue to focus on showcasing the breadth of career opportunities that the construction industry has to offer, and highlight the significant boost that our sector delivers to the Scottish economy.”

Mark Robinson, chief executive of Scape Group added, “Today’s data shows the construction sector is continuing to face difficulties. Anecdotal evidence is pointing towards a dip in productivity and output as a result of the adverse weather conditions experienced in the early months of the year, with a number of construction sites and manufacturers unable to operate during this period.

“The contraction in both total new work and repair and maintenance is troubling. The upgrades required to our vital infrastructure and services should also not be underestimated. Inadequate roads, rail, energy, schools, hospitals and housing significantly hampers the country’s productivity. With only 12 months remaining in our Brexit negotiations, it is vital that the UK’s assets and infrastructure are fit for purpose, attract inward investment and create a strong independent economy.

“New work also fell in February to £8,211 million, largely due to a decrease in private commercial new work and public new work. It is important that this decline is reversed, especially for the public sector where demand for services is only going to increase. One key example is the requirement for secondary school places which will reach 435,646 by 2020/21. The government needs to work collaboratively with the public and private sectors to support funding for both new projects and upgrades.”