“Biggest contraction since August 2012” as UK construction output shrinks again

UK construction output decreased by 2% in the three-month period ending November 2017, representing the sixth consecutive three-month period of decline and the biggest contraction since August 2012, according to official statistics revealed today.

The news prompted one public-sector body to call for a "revolution in council housebuilding".

The output of public housebuilding is still far too low to even come close to addressing the shortage of affordable housing– Mark Robinson, Scape Group

Construction output fell by £779m in the three-month time series, broadly driven by decreases in private commercial work, infrastructure and total housing repair and maintenance, the Office for National Statistics (ONS) reported.

Private commercial work decreased by £401m in November 2017. Meanwhile, both total housing repair and maintenance, and infrastructure continued their recent declines, falling by £164m and £157m respectively.

Most other sectors were broadly flat in November 2017, with only private housing providing a positive contribution to growth, increasing by £100m, representing the fifth consecutive period of growth in this sector, the ONS said.

There was some good news. Despite the overall three-month on three-month fall, construction output increased by 0.4% month-on-month in November 2017. This occurred as a result of a 0.5% rise in repair and maintenance, and a 0.4% increase in all new work, said the ONS.

Rolling three-month and monthly output, all work, to November 2017 (Office for National Statistics)

Nevertheless, the gloomy picture prompted a public-sector procurement agency, Scape Group, to call for a "revolution in council housebuilding" to stimulate activity and end the housing crisis.

"While private housebuilding remains positive, the output of public housebuilding is still far too low to even come close to addressing the shortage of affordable housing," said Scape Group chief executive Mark Robinson.

"Theresa May [the prime minister] 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.

"We need a revolution in council housebuilding, and this means greater resources and powers for local councils. I hope the Minister is the right man for the job."

Robinson said the long-term outlook for the construction sector was positive because the country’s housing and infrastructure challenges would require significant investment.

A slowdown in sales of construction products reported yesterday provided another window on the state of UK construction market.

Sales slowed in the fourth quarter of 2017 and a further slowdown is expected in 2018, according to the latest state of trade survey by the UK’s Construction Products Association, Construction Manager reported.

The survey results showed that a balance of 6% of heavy side manufacturers, such as steel, bricks, timber and concrete, reported a decrease in product sales in the fourth quarter, compared to 10% reporting a rise in the third quarter. This was the first negative balance since the first quarter of 2013.

Top image courtesy of Dreamstime

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