Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Output down in three months to August despite infra growth

The UK’s construction output fell by 0.8 per cent for the three months to the end of August despite several sectors beating expectations.

A drop in the rolling three-month stats came despite August seeing a 1.7 per cent increase in new work orders and a 3.9 per cent rise in infrastructure work for the month, according to the Office for National Statistics.

The three-month average was hit by a fall repair and maintenance work of 0.6 per cent, while new work fell 0.9 per cent for the period from June to August.

Public work excluding infrastructure was down 9.3 per cent for the three months compared with the previous three. Private commercial work also struggled, recording a 2.9 per cent fall in output for the period.

Blane Perrotton, managing director at property consultancy and surveyors Naismiths, said: “Few industries provide a better early warning system for the wider economy than construction, and the sector is starting to show the strain.

“But while the overall decline in output is modest, it’s the polarisation in the industry that is most striking.

“Demand for commercial property construction has taken a substantial hit as larger companies activate Brexit contingency plans and smaller firms hold off on plans to scale up their premises.

“Yet it’s a different story for housebuilders, who are grappling with a surge in demand. On the frontline we’re seeing a spike in the number of developers seeking to convert office buildings into residential units under the extended and popular permitted development rights.”

Despite the three-month drop, the figures for August showed a number of sectors posting growth above expectations.

Infrastructure work increased 3.9 per cent in August compared with July, and was up 4.9 per cent year on year.

Cast Consultancy chief executive Mark Farmer said: “Output contraction in the construction sector should not surprise anyone.

“The mild growth in August came from private housebuilding, but we are still not anywhere near the output required across the overall housing market.

“We are likely to be entering turbulent times and there is now a great opportunity for government to play a role in smoothing industry demand so it remains more stable across both infrastructure and building construction.”

Commenting on the figures, Scape chief Mark Robinson said: “It is particularly promising to see infrastructure work on the up, rising almost 5 per cent on the year and 4 per cent on the month.

“Infrastructure investment is the primary tool in the chancellor’s toolbox for supporting the sector in the medium to long term, and the government must give more road and rail projects the green light in the Autumn Budget. This is no time for modest gestures.”

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.