Construction Output Remained Steady Following Brexit Reveals Latest Ons Figures

The construction industry has received a boost with new figures revealing output held steady during the first full month after June’s Brexit vote with new orders and house building also increasing on the previous quarter.

After a 1.0 per cent drop in the sixth month of the year, construction output in July was unchanged with “little evidence to suggest that the referendum has had an impact”, according to the latest data released by the Office for National Statistics (ONS).

All new work increased by 0.5 per cent while all repair and maintenance decreased by 1.1 per cent.

Compared with July 2015, construction output decreased by 1.5 per cent. All new work, and repair and maintenance decreased by 0.6 per cent and 3.2 per cent respectively.

The underlying pattern as suggested by the three month on three month movement in output in the construction industry decreased by 1.2 per cent.

New orders were estimated to have increased by 8.6 per cent in quarter two (Apr to June) compared with the first three months of the year and increased by 7.5 per cent when compared with last year’s second quarter. New housing also increased by 25.0 per cent while there was a fall of 17.4 per cent in infrastructure.

There was an upwards revision of 0.6 percentage points to construction output in the second quarter of the year to -0.1 per cent, this has no impact on GDP to one decimal place.

Michael Thirkettle, chief executive of construction and property consultancy McBains Cooper, says the construction sector will view these figures “as a welcome fillip”.

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

“The low value of sterling is also providing 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 over the next few months.

“But the biggest concern for the construction industry with Brexit is its reliance on itinerant labour from EU countries because of acute skills shortages in the UK – a vital supply that will be cut off once we leave the EU.

Thirkettle is now calling on the government to prioritise upskilling the UK workforce and scrap the apprenticeship levy otherwise, he says “it will mean the industry – which accounts for a crucial six per cent of GDP – will suffer another downturn and there will be no chance of the government’s housing targets being met.”

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Last Updated on April 24, 2021
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