UK construction output falls in November

15 January 2016

Construction output in the UK in November 2015 is believed to have decreased 0.5% compared with October 2015, according to the latest report by the Office for National Statistics (ONS).

All new work was the largest contributor to the fall, decreasing 0.7%, with repair and maintenance (R&M) falling 0.2%. Within new work, there were increases in public other by 2.3%, private industrial by 1.7% and total housing by 0.9%. However, these were offset by decreases in infrastructure and private commercial work of 4.3% and 1.5%.

While overall R&M dropped by 0.2%, there were falls in both components of housing repair and maintenance, as private fell 1.3% and public fell 0.7%. Non-housing repair and maintenance increased 0.8%.

Compared with November 2014, output in the construction industry decreased by 1.1%. All new work increased 1.3% while there was a fall of 5.1% in repair and maintenance. The main upwards contribution to all new work came from infrastructure which increased 11.7%.

Comparing the three months, of September 2015 to November 2015 with the previous 3 months, construction output fell 1.4%. All new work and all repair and maintenance decreased 1.4% and 1.2%.

When comparing September to November 2015 with the same three months a year ago, construction output was estimated to have decreased 0.1%. All new work increased 2.4% while repair and maintenance decreased 4.3%.

Corry Bourke, director of portfolio management at Urban Exposure, a residential development finance provider, said, “The figures highlight that the UK is struggling to build enough homes as well as the constraints in the sector regarding planning, the shortage of key materials and a skilled workforce.

“Despite the slowdown in construction output, there is optimism in the industry, but it will be essential for the government to bring forward its programme to build 400,000 new homes. Equally, it’s important that some of the £7 billion (€9.16 billion) being pledged is used to tackle the skill shortages to ensure productivity gains are achieved in the near future.”

Andrew Bridges, managing director of London estate agents Stirling Ackroyd, said, “Housing is surfacing as the deepest and most troubling challenge for the whole UK – our greatest cities need to grow, and a whole generation need somewhere to live. In particular, our capital city is constrained and limited by a sharpening shortage of affordable and quality homes.

“But the longing of Londoners can’t construct new homes on its own. There are still too many obstacles in the way of property developers for the industry to be healthy, sustainable and truly competitive.”

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