Construction output figures released amid Brexit ‘uncertainty’

Steven Simpson, MD of Cruden Homes (East) 

THE latest ONS output figures have revealed a mixed bag for the construction sector.

Findings show that while output in the three-month on three-month series decreased by 0.6%, February’s figures showed a rise in output of 0.4% in the month-on-month series as well as a 1.1% rise in all new work.

Steven Simpson, managing director of Cruden Homes (East) said it was “encouraging” to see figures climb this month. He added, “There continues to be high market demand for new housing and Cruden has had a strong start to 2019 – in fact the best in recent years. That said, the industry is facing a series of challenges including a growing lack of skilled workers, rising material supply costs and continued uncertainty over Brexit which is starting to impact confidence in some market sectors. To help future proof the industry, it is vital that we invest in a pipeline of new talent and encourage more young people to consider a career in this thriving sector.”

Mark Robinson, Scape Group chief executive, said the political uncertainty in the early months of 2019 has led to MPs and the country being “distracted from the business of doing business”. He added, “It is no surprise that construction output decreased during this time, with the constant threat of the UK crashing out of the EU with a no-deal, hanging over everyone’s heads. It is however positive to see infrastructure projects grow by 12.6% compared to February 2018, while new public housing saw annual growth of 14.7%. Both infrastructure and social housing are vitally important to the success of our local communities.

“In the last 24 hours it is looking likely that EU leaders will offer Theresa May a year-long extension to Brexit, this could do wonders for the construction industry. Incremental and short-term extensions prevent companies from pressing forward with essential projects. If this extension is agreed between the UK and EU leaders, the construction industry should experience a spring bounce back that should put us in good stead for the summer months.”

Clive Docwra, managing director of construction consulting and design agency McBains, also touched on the ongoing Brexit uncertainty. He said, “Given the continuing ‘will we, won’t we’ saga of when the UK will be leaving the EU, today’s figures buck the trend we were expecting. However, although there was moderate growth in February, the general trend is of slowing growth since mid-2018.

McBains MD Clive Docwra

“Indeed, the long-term outlook is even gloomier as a weak UK economy, volatile pound and worries over the long-term impact of Brexit mean caution from investors is the watchword, as evidenced by a fall in private commercial new work. We expect that will translate into a continued, more serious, contraction for the sector over the coming months.”