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Construction growth flatlines amid Brexit uncertainty

by: Marc Shoffman
  • 10/07/2019
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Construction growth flatlines amid Brexit uncertainty
Brexit uncertainty has left the construction sector “punchdrunk as a boxer” as official figures show the market was flat in May.

Data from the Office for National Statistics (ONS) has revealed UK construction output was flat in May as an increase in new work was offset by falls in repair and maintenance tasks.

The figures showed new work in the private and public sector increased by 0.3 per cent in the three months to May 2019, but there was a 0.5 per cent drop in repair and maintenance.

In new work, the increase was driven by growth in private commercial new work and public new housing, which saw growth of 2.2 per cent and 8.4 per cent respectively.

Private housing work was up just 0.4 per cent, the ONS figures showed.

Blane Perrotton, managing director of property consultancy and surveyors Naismiths, said the construction industry was “tottering three steps forward and then two steps back”.

Perrotton said: “This latest snapshot of the sector shows it is still on its feet, but stumbling aimlessly and yearning for the Brexit bell.

“Perhaps most striking is the detail behind the stagnant headline figure. Private sector housebuilding – long the standard bearer of an industry that was in retreat elsewhere – is declining, while public sector housebuilding has rallied to a decent rate of growth.

Perrotton noted that while zero growth is not a decline, “the omens for the future are not good”.

However, Neil Knight, business development director of Spicerhaart Part Exchange & Assisted Move, highlighted that the figures look better on a non-seasonally adjusted basis.

He said: “There was a 3.2 per cent rise in the number of private houses built in May compared to April, marking a 4.9 per cent annual rise. When you look at the latest three months compared to the previous three months, there is an even more significant rise; private housing construction is up 11 per cent while public housing construction is up 16.5 per cent.

“I think there are a few things going on here. Firstly, the summer months are always busier than the winter in terms of house building, so we would expect to see a rise at this time of year compared to the Winter and especially, compared to the end of the year with Christmas etc.

“However, these figures also show an annual rise, which means overall, construction is busier than it was last year.”

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