Third successive rise in output

The latest figures from the ONS show that construction has enjoyed a third successive rise in output over the summer.

August returned healthy figures for the industry, helping to stabilise its position after a particularly shaky start to the year. These latest statistics have provided a boost to confidence at a time when industry, business, politicians and voters all wait on word from Brussels and the result of Brexit negotiations.

Construction output increased by 2.9% in the three months to August 2018, seeing figures rise by £1,156M.

Britain’s house builders have led the recovery, once more, with private housing new work increasing by £442M, supported by notable three-month on three-month growth in the non-housing repair and maintenance sector, which increased by £262M.

Infrastructure work is also keeping Britain building, with a £232M jump in output, however, it had been noted that the output focused mainly on existing and long-term projects rather than new work.

In contrast, private commercial new work and private industrial new work both dropped in the three months to August, decreasing by £45M and £9M respectively in August 2018.

In the more volatile monthly series, output has declined by 0.7%, with falls from July figures in both repair and maintenance and all new work, rattling the industry.

Deadlock on Britain’s exit from the European Union is hampering recovery of the industry, with investors awaiting the conclusions of negotiations before committing to new projects. Industry feeling is that it is unlikely this will change until the deadlock is broken.

Michael Thirkettle, Chief Executive of leading construction consulting and design agency McBains, said: “These figures, which show a third successive increase in output, will be cautiously welcomed by the construction industry.

“We’re still not out of the woods however, with Brexit worries still on the horizon and the cost of imported materials remaining high due to the weak pound. Before this recent upturn in output, we saw several months decline so evidence of sustained growth is needed before we can safely say we’re on the road to recovery.

“In particular, construction needs some incentives from the government to help give housebuilding a further boost. We’re still building fewer homes than required, and while we heard a lot at the recent party conferences in terms of demand-side policy announcements to help more people onto the housing ladder, there was little detail on the supply side to help the industry build the homes that will allow such aspirations to be met.”

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