Construction Output Remained Steady Following Brexit Reveals Latest Ons Figures

The construction industry has received a boost, with new figures revealing that output remained stable during the first full month following the Brexit vote in June, with new orders and house building also increasing over the previous quarter.

According to the latest data released by the Office for National Statistics, construction output in July remained unchanged after falling by 1.0 percent in the previous month, with “little evidence to suggest that the referendum had an impact” (ONS).

All new work increased by 0.5%, while repair and maintenance decreased by 1.1%.

Construction output fell by 1.5% in July compared to July 2015. All new work, as well as repair and maintenance, fell by 0.6% and 3.2%, respectively.

The underlying pattern, as indicated by the three-month-on-three-month movement in construction output, decreased by 1.2%.

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New orders were estimated to have increased by 8.6 percent in quarter two (April to June) when compared to the first three months of the year, and by 7.5% when compared to the second quarter of last year. New housing also increased by 25.0 percent, while infrastructure fell by 17.4 percent.

There was a 0.6 percentage point increase in construction output in the second quarter of the year to -0.1%, which has no effect on GDP to one decimal place.

According to Michael Thirkettle, CEO of construction and property consultancy McBains Cooper, these figures will be viewed as a “welcome fillip” by the construction industry.

“Although some projects were put on hold prior to the referendum, now that the outcome is known, the industry can plan with a greater degree of certainty, and the majority of investors are telling us that they are not planning to cancel any major projects,” he says.

“The low value of sterling also presents an opportunity for more foreign investment in the UK, which could provide a knock-on boost to the wider residential and commercial markets, so we are hopeful that construction output will pick up in the coming months.”

“However, the biggest worry for the construction industry with Brexit is its reliance on itinerant labour from EU countries due to acute skill shortages in the UK – a vital supply that will be cut off once we leave the EU.”

Thirkettle is now urging the government to prioritise workforce upskilling and scrap the apprenticeship levy; otherwise, he claims, “it will mean the industry – which accounts for a crucial 6% of GDP – will suffer another downturn and there will be no chance of the government’s housing targets being met.”

Last Updated on December 30, 2021


Author: Indra Gupta

Indra is an in-house writer with a love of Newcastle United and all things sustainable.

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