Output decreases as infrastructure and housing activity weakens, reveals ONS

Sharp falls in infrastructure and new private housing saw UK construction output dip 1.7 per cent in February - its biggest drop in almost a year - the latest figures reveal.

All new work fell by 3.3 per cent in the second month of the year after growing by 0.7 per cent in January, according to Office for National Statistics (ONS).

The fall in all new work was driven by the first month-on-month drop in infrastructure since October 2016, which decreased by 7.3 per cent, and housing, which fell for the second consecutive month by 2.6 per cent.

There was also a fifth consecutive month of negative growth in private industrial other new work, which decreased by 4.7 per cent.

Despite the February decrease, construction output grew by 1.5 per cent in the past three months when compared with the previous quarter, driven mainly by strong growth of 2.2 per cent in infrastructure and 0.6 per cent growth in repair and maintenance.

Concerns over the impact of Brexit is contributing to the gloomy figures with the future looking "much less rosy", says Michael Thirkettle, chief executive of property consultancy McBains Cooper.

“So far it’s not led to the problems many feared when sterling took a hit following the referendum result last summer, but the future looks much less rosy. This is because a significant proportion of UK construction workers are from the EU, as high as a quarter of the total in London.

“With a prospect of acrimonious divorce negotiations with the 27 EU countries taking place over the next two years and no promise of freedom of movement being retained, as was also signalled this week, many of these workers could decide to head home for good. This would be disastrous for UK projects, not least the government’s ambitious housebuilding targets.”

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