Construction defies Brexit pessimism in Q3…

The Construction Product Association’s (CPA) latest Construction Trade Survey, shows that the construction industry grew for a fourteenth consecutive quarter in Q3.  Firms across all areas of construction reported an increase in activity, including building contractors, SMEs, specialist contractors, civil engineers and product manufacturers.  Indicators of future growth weakened, however, and activity may be severely hindered by inflationary pressures caused by rising wages and imported raw materials costs.

Commenting on the survey, Rebecca Larkin, Senior Economist at the CPA, said, “Following the EU referendum, the entire construction supply chain reported favourable conditions and growth in activity in Q3.  Forward-looking expectations for Q4 and the year ahead were more pessimistic, with the majority of orders and enquiries balances the lowest in two years, or driven by a single sector:  private housing.

“A further factor that stood out as a downside risk to activity in the near-term is the sharp rise in the cost of imported raw materials due to the recent depreciation in the Sterling, which is providing a dual hit to construction costs alongside existing wage inflation pressures.”

Suzannah Nichol, Chief Executive of Build UK said, “While the industry demonstrated its resilience by continuing to grow during Q3, we can see that projects are increasingly affected by construction’s skills challenges.”