THE UK construction sector saw a 0.6% dip in output in the three-month on three-month all work series in January 2019, according to the latest figures from the Office for National Statistics (ONS).
This decrease was said to be driven by a 2.3% fall in the all repair and maintenance series, which was offset by a 0.3% increase in the all new work series.
The fall in the three-month on three-month all repair and maintenance series was attributed to non-housing repair and maintenance, which fell by 3.2%, and private housing repair and maintenance, which fell by 2.3%. Public new housing grew 5.0% but this had a “minimal” impact on the top-level figures due to the small size of the series, the ONS stated.
The all new work series saw a 2.8% rise in January 2019 in the month-on-month series, reversing the 2.8% decline seen in December 2018, with January output being 1.8% higher in 2019 than the same month the previous year. The ONS noted that while there was growth in the month-on-month series, the rolling three-month on three-month series provides a more “comprehensive” picture of the underlying trends in the industry.
New orders fell by 1.9% in Q4 2018 compared to the previous quarter, with all other work decreasing by 3.8%, more than offsetting all new housing’s 2.3% growth during the same period.
Kevin Reid, managing director of the Cruden Group commented on the figures, “In contrast to a dip in the latest construction output figures, the housebuilding industry remains strong with a continuing demand for high quality, affordable homes. However, this is set against a backdrop of a lack of skilled workers coming into the sector, coupled with an ageing population making up a high percentage of the current workforce. Initiatives such as last week’s Scottish and National Apprenticeship Week are vital to shine a spotlight on the sector and to educate more young people on the diverse range of roles available in construction.”
Clive Docwra, MD of construction consulting and design agency McBains, described the figures as “moderately encouraging”, especially with the prospect of a no-deal Brexit still on the table. “Many of our clients are telling us they are biding their time before they commit to investing in new projects until the whole Brexit situation becomes clearer, as evidenced by today’s statistics showing a fall in new orders over the last quarter of 2018,” he said. “The next few months could prove to be a crunch point for the industry.”
Mark Robinson, Scape Group chief executive commented, “The construction sector’s traditionally sluggish December was slowed down even further by the gloomy economic backdrop. But activity made a U-turn in January. Businesses were no longer prepared to wait out the Brexit storm and are started getting on with the business of building. The pick-up in repairs and maintenance and new infrastructure work demonstrates that.
“That uptick could end up being temporary. Theresa May is taking it to the wire with Brexit, and there are just days left to finalise a deal. With no time to tie up loose ends the, and zero clarity on how the UK can continue to assess essential construction talent from the EU, the industry will likely be left in the lurch.”
