Trade body calls for EU exit plan as construction output takes hit

Brian Berry, chief executive of the FMB, said a ‘huge’ dip suffered in construction output in June reflected the trade body’s fears that uncertainty over the outcome of the EU referendum would impact the sector.

“In the wake of the UK’s vote to leave the EU, there is a growing concern that this period of uncertainty is only just beginning. Construction is an industry that is particularly vulnerable to dips in confidence and it appears that many clients were hesitant to commit to new projects as they were unsure of what the future held. An exit road map is needed to show what steps are going to be taken to withdraw from the EU.”

Berry also said that the results underlined the importance of clear leadership from the government and said it was ‘imperative’ that the government offsets the uncertainty felt by the sector. While he saw the Chancellor’s plan to lower corporation tax and the government’s aim to build one million new homes by 2020 as positive steps, he said that ‘much more needs to be done’.

He added: “Dithering over infrastructure decisions will send out entirely the wrong message to firms of all sizes. More than ever, investment is needed in a sector that generates £2.84 in the wider economy for every £1 spent.”

The figures, which show that construction output fell at its fastest since 2009, were registered by the Market/CIPS UK Construction Purchasing Managers’ Index. It was indicated that the fall had been led by a decline in residential building and a reduction in commercial work.

David Noble, group chief executive officer at the Chartered Institute of Procurement & Supply, said that firms would be looking to the Bank of England and the government to remedy the situation if it worsens.