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Construction output surges in November

Construction output defied mounting economic uncertainty in the three months to November with new work surging to its highest level for almost two years.

Output of all construction work for the three months to November increased 2.1 per cent, and output of new work increased by 3.4 per cent. This was the highest three-month on three-month increase since the first quarter of 2017.

KPMG managing director Sur Kershaw said the increase could represent a catch up on work that was lost earlier on in the year.

”With outputs lower than usual at earlier points of the year due to poor weather conditions, the increase in momentum is in line with what we’d expect,” Ms Kershaw said.

Infrastructure work reported the largest increase at 6.5 per cent, with the housing sector also performing well, shaking off Brexit uncertainty to increase 5.2 per cent.

PMI data for December showed civils work was increasing at the fastest pace for 19-months.

Commercial construction reported its first increase in output for 18 months, with the value of work up 0.4 per cent in the three months to November.

The overall strong performance was welcomed in the face of the increasing uncertainty around the government’s strength and plans for Brexit. But industry figures warned against complacency.

Scape chief executive Mark Robinson said: “While it is promising to see that the private sector shook off Brexit hysteria and the accompanying economic uncertainty that dominated the headlines in autumn, public new work is still dragging behind, and on the ground we are seeing instances that clients are still hesitant to push projects forward.”

FMB director of external affairs Sarah McMonagle added: “A growing and prosperous construction sector will be a distant memory if the government allows the UK to crash out of the EU without a deal in place.”

Scape and the FMB both highlighted the government’s proposed strict limits on foreign workers coming to the UK as a serious threat to the sector.

Ms McMonagle said: “In the immigration white paper, published at the end of last year, the government revealed that they will make few allowances for low-skilled workers to enter the UK post-Brexit.

“Most tradespeople will be defined as low-skilled and therefore will not be permitted to enter the UK, regardless of whether they are from the EU or further afield.

“It is crucial that the government introduces a post-Brexit immigration system that continues to allow us to draw on essential migrant workers or else their house building and infrastructure targets will be totally unachievable.”

Mr Robinson added: “If we get this wrong all the business optimism in the world won’t make a difference, as we won’t have the manpower to deliver new homes and essential infrastructure projects.”

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