Warning Over UK Construction Output

Burflex House, Clay Street, Hull, East Yorkshire, HU8 8HA E. info@burflex.co.uk

Burflex House, Clay Street, Hull, East Yorkshire, HU8 8HA E. info@burflex.co.uk

Warning Over UK Construction Output

Warning Over UK Construction Output

The latest figures from the Office for National Statistics (ONS) revealed that the UK’s construction output dipped slightly in October.

According to the ONS data, construction as a whole saw activity fall by 0.2 per cent in October. While this may not seem like a big drop, it’s considerably lower than the 1.7 per cent growth posted in September.

There was some positive news for housebuilders though, with the private house building sector the one that buoyed the other areas up. Private house building activity experienced a 2.4 per cent increase in October.

However, public house building activity dropped by 8.1 per cent in the same period, while infrastructure was also down by 3.7 per cent.

The ONS did point out that although activity fell in October, overall building in the private and public housing categories were up in the July-October quarter, compared to the second quarter of this year.

The Federation of Master Builders (FMB), however, has stressed that this dip is a warning that things need to change within the country’s construction industry.

According to the FMB, the October decline can be attributed to the uncertainty caused by the ongoing Brexit arguments and rising costs within the sector.

Sarah McMonagle, director of external affairs at the FMB, described the industry as “more or less flat-lining”.

Rising costs are an issue for small and large firms alike, she explained. There is a combination of factors affecting construction businesses, including rising wages due to the continuing skills crisis, and higher costs of materials. The latter issue is caused in part by the depreciation of sterling following the vote to leave the EU.

“We are expecting material prices to continue to squeeze the margins of construction firms with recent research from the Federation of Master Builders showing that almost 90 per cent of builders believe that prices will continue to rise in the next six months,” she asserted.

Ms McMonagle also criticised the government’s proposals for immigration following Brexit, noting that the system suggested at present would “severely worsen the skills shortage”.

She explained that many migrant workers from the EU and further afield fill vital construction jobs, such as bricklaying and carpentry. A post-Brexit cap on what the government terms low-skilled workers will make it more difficult to recruit such tradespeople.

Construction output will keep falling if a better system that serves the need of the building industry is not put in place, Ms McMonagle warned.

But it isn’t all bad news for the UK’s construction sector. According to the government’s projected spending, there will be £600 billion of new infrastructure projects in the next decade.

This is based on the National Infrastructure and Construction Pipeline, which includes projects constructing hospitals, schools and roads, among other things. Among the biggest schemes named as part of the pipeline are the Hornsea Project One offshore wind farm and East West Rail.

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