GB construction output falls in August

GB construction output fell 1.5% in August, compared with the previous month, according to the Office for National Statistics (ONS).

The ONS has now published two reports on construction output in GB post-Brexit – the UK’s decision to leave the European Union – which began with a revised increase of 0.5% in July, after initially reporting no movement.

All new work fell 1.4% in August, which was driven by a lack of infrastructure projects, while repair and maintenance fell 1.5% during the same period.

There was a fall of 1.3% in construction output over a three-month period. However, output increased marginally by 0.2% year-on-year, compared to August 2015. All new work increased 1.1% year-on-year, but repair and maintenance fell 1.3% for the same period.

Michael Thirkettle, CEO of construction and property consultancy McBains Cooper, said, “These figures may in part reflect a Brexit hangover given the short-term uncertainty around the result, although we would caution against too much being read into the result of the EU referendum in isolation.

“The real concern for the industry, however, is what a hard Brexit will mean for its labour supply. Because of skills shortages in the UK, skilled EU trades are a vital source that will be cut off once we leave the EU.”

Thirkettle added that demonising skilled migrant workers and imposing regressive immigration policies would demolish any hopes of meeting housebuilding targets and solving the housing crisis. He said that the government should send a signal that migrants would be welcome in the industry, and add skilled construction workers to its shortage occupations list.

Meanwhile, Rob Domeney, head of the Manchester, UK office of environmental and engineering consultants RSK Group, said, “It’s evident that the Brexit effect is still having a degree of impact as some projects and investments are likely to still be on hold because of the uncertainty surrounding Brexit and the eventual shape that this will take.

“What the industry is really looking for is a sign of the government’s clear commitment to the Northern Powerhouse, on which there have been mixed messages recently. A commitment to projects like High-speed rail 2 and High-speed rail 3 would spark renewed investment in the region, having a real impact on the construction sector and the wider economy.”