New construction output figures: property consultants comment

The new construction output figures published by the ONS today show a mixed picture for the industry:

  • The all work series decreased by 0.3% in Quarter 4 (Oct to Dec) 2018, following an increase of 2.1% in Quarter 3 (July to Sept) 2018; this decrease was driven by repair and maintenance output, which was down by 2.8%.
  • The decrease in repair and maintenance was caused by drops in private housing and non-housing repair and maintenance output of 4.0% and 2.9% respectively.
  • These falls were offset somewhat by a 1.1% increase in all new work, driven by increases of 1.9% in infrastructure and 1.4% in private commercial new work.
  • The monthly series saw a sharper decline, with the all work series in December 2018 decreasing by 2.8% below the level seen in November 2018; this is the largest month-on-month fall in growth for all work since June 2012, when the series dropped by 4.3%.
  • When compared with 2017, the level of all work in 2018 saw a 0.7% increase; this was the lowest annual growth since 2012, which saw a 6.9% decrease in annual output.

Commenting on the figures, Clive Docwra, managing director of construction consulting and design agency, McBains, said: “Today’s figures show a mixed picture – unsurprising given concerns about the UK economy and whether it can withstand a no-deal Brexit. These fears, coupled with longer running issues such as high import costs and skilled worker deficits, are now cutting through and impacting key investment decisions.

“To turn the corner, the industry needs confidence and the support of the government. The Brexit uncertainty will need clarifying soon if the sector is to push on and build the homes our country needs.”