Brexit fears add to 0.8% fall in January new work output

Aaron Morby 8 months ago

Construction work output slipped back 0.2% in January led by a 0.8% fall in new work while repair and maintenance rallied to rise by 0.8%.

The latest monthly figures suggest the industry is slowing but the ONS has been fickle with its previously published figures for the last quarter of 2015. Today it also revised a previously estimated 0.4% fall in output during the last three moths up into 0.3% growth.

ONS monthly orders figures

ONS jan 2016

Despite the upward revision, new order figures also published this morning for the last quarter of 2015 point to easing growth rates with a 0.5% fall compared to the third quarter.

Michael Thirkettle, chief executive of construction and property consultancy McBains Cooper, said: “We are seeing the uncertainty around Brexit delay investment decisions, which is dampening the market. At the same time, the sector is desperately short of skilled workers – particularly bricklayers, carpenters and electricians. 

“If the UK leaves the EU, construction companies fear they would lose access to the pool of skills from Europe that they are relying on – making a bad situation worse.”

Noble Francis, economics director at the Construction Products Association, said:  “The fall in the ONS’s construction output in January was disappointing but largely reflects the impacts of poor weather at the start of the year with floods in many parts of the country. 

“In addition, skills shortages in sectors such as house building have meant that project costs have risen and affected the viability of sites.”

“Our forecasts anticipate that output will increase 3.6% in 2016, with growth in the three largest sectors of construction; private housing, commercial and infrastructure. 

“Nevertheless, while fundamentals such as projects in the pipeline remain good, the risks around the forecast are quite high due to skills shortages, concern about the delivery of major projects like Hinkley Point C and increased uncertainty for investors owing to the EU referendum.”

In the January returns by for new construction work, there were decreases in public new housing (-10.6%) and infrastructure (-8.6%).

These falls were offset by increases in private commercial (4.7%), public other new work (1.6%), private industrial (0.7%) and private new housing (0.6%).

Within the repair and maintenance sector, housing jumped3% while there was a decrease of 1.5% in non-housing repair and maintenance.

Compared with January 2015, output in the construction industry decreased by 0.8%.

Latest news

Murphy wins UK-Belgium 1GW interconnector project

Contractor will develop nine buildings at Richborough converter station for Nemo Link
6 hours ago

Hard hats light-up to boost safety

Specialist JSP launches fibre optic lighting system which clips on safety helmets
4 hours ago

Government kicks off CITB reform review

Former construction tsar will propose industry training board overhaul
7 hours ago

Van Elle raises £40m in stock market debut

Piling specialist targets bolt-on acquisitions and regional expansion
12 hours ago

Willmott Dixon resi arm gets Woking towers go-ahead

Willmott Residential will appoint a builder early next year for triple tower scheme
11 hours ago

First £800m Keepmoat PRS deal homes set for Sheffield

24-home scheme kicks off plan to build 5,000 private rental homes countrywide
11 hours ago

Worker dies in site hut poisoning

Pile testing firm fined after father-of-three dies in site hut tragedy
12 hours ago

Calls for Uber employment probe to focus on construction

UCATT wants to see HMRC focus on employment status in construction
12 hours ago

Government approves Heathrow for airport expansion

Third runway to be built at Heathrow as decision finally made
1 day ago

Clancy profit dented by framework start-up costs

Management strengthened as contractor focuses on enhancing framework performance
1 day ago

Specialist contractor sets up crack DIY squad

Demolition contractor Mick George Ltd launches 'Mick's Mates' service
1 day ago

£1.4bn Brent Cross shopping mall expansion unveiled

Enabling works for the extra 1.4m sq ft extension to start next year
1 day ago

Wates bags £130m trio of jobs for Select Property

Multi-site student accommodation building deal in Manchester, Newcastle and York
2 days ago

BAM lands 2,700 place Jaguar Land Rover car park

Multi-storey car park for staff and production cars thought to be worth over £25m
1 day ago

£2.8bn National Grid plan to bury power lines in Cumbria

Plan to put lines underground and under Morecambe Bay to protect the Lake District.
1 day ago

MCS lands £6.5m cladding deal at superstore

Kier awards major package contract to Massey Cladding Solutions on Trago Mills job
1 day ago

Shaylor hails £100m post-Brexit orders

Midlands residential and student market lifts Walsall builder
1 day ago

Construction boss jailed for £6.9m payroll fraud

Court hears how building boss and accountant funded lavish lifetstyles with payroll scam
2 days ago

ISG gets start date for £39m Liverpool site

Mixed-use scheme is latest phase of Knowledge Quarter development
2 days ago

Construction plant skills card scheme under review

Future ownership of the CPCS under discussion
2 days ago

Blaze destroys Renfrewshire timber homes site

Fire strikes at second timber frame building site in a week
2 days ago

Costain poaches William Hare project director

Alex Smale joins Costain as construction director for Hinkley Point contract
2 days ago

Profit slides at Osborne as legacy jobs settled

Operating margin slides to 1% but outlook remains strong
2 days ago

Clugston bags 13th major incinerator job

Meet the buyer event to be held next month for Deeside energy from waste scheme
2 days ago

Bidding starts on £70m Worcester Southern Link Road

Worcester's notorious Carrington Bridge will be widened to dual carriageway
2 days ago

Unite plans 570-bed Sheffield student scheme

Student rooms developer will spend £35m on city centre project
2 days ago

GRAHAM lands £150m Barnet major works deal

Leisure centre and school sites kick-off five-year partnership
5 days ago

Manchester 52-floor skyscraper approved

St John's Place tower at former Granada Studios site gets green light
5 days ago

Lendlease renews site access deal with HRS

Latest monitoring technology to be used at all contractor's sites
5 days ago

Michelmersh calls end to brick price rises

Increased competition sees prices remain flat
5 days ago