No Need Panic Says Decorean Ons Figures Reveal Construction Output Slipped 07 Second Quarter 20

Despite the fact that UK construction output fell 0.7% in the second quarter of 2016 and 1.4% year on year, Shraga Stern, director at London-based construction firm Decorean, believes there is no need for “any panic in the industry”

According to the latest figures released by the Office for National Statistics, June’s output drop of 0.9% compared to May was a slightly smaller drop than expected (ONS).

The construction industry’s output was estimated to have decreased by 0.7% between April and June compared to the first three months of the year.

The quarter’s downward pressure came from all new work, which fell by 0.8%, and repair and maintenance, which fell by 0.5%.

The overall output in the second quarter of 2016 is estimated to have decreased by 1.4% when compared to the same period in 2015.

Stern, on the other hand, believes the drop is due to the time of year rather than the impact of Brexit.

“Although construction output fell by 0.9% in June, we do not believe there is cause for concern in the industry.” “He stated.

“Historically, the broader industry experiences a dip in the summer months, so we do not believe this is the result of Brexit.

“In our day-to-day operations as a housebuilder, we continue to see an appetite, and we believe that other construction markets will recover very soon.

“Patience is essential, as it is with any market slowdown or dip. We are confident that the entire market will recover as the year progresses.”

The statistics do not surprise Darren Walker, bid proposal director at integrated property services group Styles&Wood group plc.

“Those who have been following the Markit/CIPS PMI for the sector over the past few months will be unsurprised by the latest ONS figures for construction output.”

“However, the refurbishment and fit-out sectors are outperforming the rest of the industry. The result of limited supply versus demand in the commercial sector is continuing to present opportunities. Growth is expected to continue as those with large estates must refresh and renew assets.

“There is a particular appetite for commercial building conversion.” Those with legacy Grade B stock are realising that with so many new modern schemes on the market, their properties are vulnerable to low occupier interest.

“The ongoing demand for housing in major urban areas creates a need for residential space, which drives forward the reconfiguration of buildings into living space. The recovery of the leisure and tourism markets is increasing demand for hotel accommodation, and conversion of Grade B stock offers hotel owners and operators an alternative to new construction.

“Early indicators point to an increase in investment across the shopping-centre retail and banking sectors, following a period of relatively static growth over the previous 12 months.”

“Large-scale opportunities in the healthcare and education sectors are also emerging as a result of projects in private healthcare work and on national frameworks for education; universities across the country are continuing to invest in redevelopment projects, providing a strong pipeline of potential work into the sector.”

Last Updated on December 28, 2021

Indra-Gupta

Author: Indra Gupta

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

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