Construction Output Unchanged in July 2016

The latest official figures show that construction output was unchanged in July 2016 compared to the previous month; however there was a strong rise in new orders in the second quarter.

The latest bulletin from the Office of National Statistics puts construction output growth at 0% for July 2016 compared with June last year. All new work rose by 0.5%, while all repair and maintenance fell by 1.1%.

In comparison with July 2015, construction output fell by 1.5% and all new work, and repair and maintenance fell by 0.6% and 3.2% respectively.

The underlying pattern as suggested by the three-month on three-month movement in output in the construction industry decreased by 1.2%.

Construction industry new orders in the second quarter (April to June) of 2016 were estimates to have risen by 8.6% compared with the first quarter (January to March) of 2016 and increased by 7.5% compared with the second quarter of last year. New housing rose by 25%, while infrastructure fell by 17.4%.

Chief Executive of construction consultant McBains Cooper, Michael Thikettle, said that the construction industry will see these figures as a welcome fillip as they are the first ones to be gathered after the Brexit result.

Thirkettle continued: “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.

“The low value of sterling is also providing an opportunity for more foreign investment in the UK, which could provide a knock-on boost to the wider residential and commercial markets so we are hopeful that construction output will pick up over the next few months.”

He added that the biggest concern for the construction industry in terms of Brexit is its reliance on itinerant labour from EU countries given the UK’s acute skills shortages.


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