UK construction suffers from its lowest annual growth since 2012

A leading construction boss in the UK says government and councils need to provide greater transparency on project pipelines as construction output was shown to shrink to its lowest level since 2012.

According to the latest Office for National Statistics (ONS) figures, output fell 2.8% month-on-month in December, contributing to a longer-term drop of 0.3% in Q4 of 2018.

Rolling three-month growth fell by 0.3% in December 2018, following several months of growth prior to it. While the housebuilding sector suffered badly with new work contracting by 6.8% month-on-month.

Compared with 2017, the level of all work in 2018 saw a 0.7% increase - the lowest annual growth since 2012 when annual output decreased 6.9%. Overall new work rose 1.1%, driven by increases of 1.9% in infrastructure and 1.4% in private commercial new work.

Mark Robinson, Scape Group chief executive, said today’s output statistics reinforced the need for greater transparency over project and pipelines and the so-called “boom” in November and a strong Q3 could have “hoodwinked the industry into thinking it was business as usual”.

“The first six weeks of 2019 have continued the theme of uncertainty that has dogged the country since the referendum,” Robinson said. “The announcement this morning that the Immigration White Paper is set to hit the public and private sector with a £1bn price tag further reiterates the need for the government to re-think proposals that restrict our access to European construction workers. The country has big ambitions to deliver new homes and provide the infrastructure to support new and existing communities, but we cannot do this without people on the ground.”

Clive Docwra, managing director of  construction consulting and design agency McBains, said it was up to the government to instil confidence and support for the industry, particularly when it came to Brexit.

“Today’s figures show a mixed picture – unsurprising given concerns about the UK economy and whether it can withstand a no-deal Brexit,” he added. “These fears, coupled with longer running issues such as high import costs and skilled worker deficits, are now cutting through and impacting key investment decisions.”

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