UK construction output flat in July

UK construction output remained the same during July 2016, compared with the previous month, with no obvious effects of Brexit – the UK’s decision to leave the EU – according to the Office for National Statistics (ONS).

However, output decreased 1.5% year-on-year.

All new work increased 0.5% month-on-month and 0.6% year-on-year, while repair and maintenance decreased 1.1% month-on-month and 3.2% year-on-year.

New orders for the UK construction industry in the second quarter of 2016 were estimated to have increased by 8.6% compared with the first quarter, and 7.5% compared with the second quarter of 2015.

Commenting on the results, Michael Thirkettle, CEO international construction and property consultancy McBains Cooper, said, “The construction industry will view these figures as a welcome fillip, given they are the first gathered since the Brexit result.

“Although some projects were put on hold before the referendum, now the result is known the industry can plan with a degree of increased certainty and the majority of investors are telling us that they are not planning on cancelling any major projects.

He added that the low value of sterling was also providing an opportunity for more foreign investment in the UK, which he said could provide a knock-on boost to the wider residential and commercial markets.

He said, “But the biggest concern for the construction industry with Brexit is its reliance on itinerant labour from EU countries because of acute skills shortages in the UK – a vital supply that will be cut off once we leave the EU.

“We are calling on the Government to prioritise upskilling the UK workforce and scrap the apprenticeship levy otherwise it will mean the industry – which accounts for a crucial 6% of GDP – will suffer another downturn and there will be no chance of the Government’s housing targets being met.”