UK construction activity declines at fastest rate in five years

New data published today has provided a stark warning for the construction industry with output growth in the sector shown to be at its worst level since 2012. 

Figures published by Office for National Statistics (ONS) reveal that output fell at its fastest pace in five years in the three months to November 2017. Output fell 2% over the period, the sixth consecutive rolling period of declines and the sharpest fall since August 2012. The value of construction output declined by £779m. However, on a month-on-month basis, output edged up 0.4% between October and November.

Commenting on today’s statistics, Mark Robinson, chief executive of the public procurement group Scape, said: “Today’s figures underline just how important confidence and certainty are for the industry and the wider economy. However, we must not lose sight of the bigger picture. The long-term outlook for the construction sector is positive and the public sector will play a significant role in strengthening confidence in the year ahead, because the country’s housing and infrastructure challenges will require significant investment. The government recently reaffirmed its commitment to innovation and investment in November’s autumn budget, including the extension of the infrastructure fund.”

Private housebuilding was the only area where volumes increased, rising 0.8% during the three months. But despite the rise, the output of public housebuilding has been described as being still far too low when it comes to addressing the shortage of affordable housing.

“Theresa May has just named the seventh housing minister since 2010 in the midst of a nationwide housing crisis, and I urge the new Minister to look seriously at the role local councils can play in affordable housing delivery,” Robinson added. 

“The output of public housebuilding is still far too low to even come close to addressing the shortage of affordable housing. The Government must also seek to create a more connected Britain, and a stronger Northern Powerhouse and Midlands Engine. The UK has a strong pipeline of new work, but we must ensure a joined-up approach on delivery to ensure efficiency and alleviate pressure on the availability of skills.”

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