Construction output drops in December: ONS

Official data from the Office for National Statistics shows that construction output fell in the final month of last year.

Seasonally adjusted figures reveal that new work in private new housing fell 6.8 per cent compared to the 3.1 per cent growth seen in November 2018.

December’s figure contributed to overall new work decreasing by 1.6 per cent, whereas in November this figure grew by 0.8 per cent.

The report notes that even an increase in smaller public new housing to the tune of 10.9 per cent could not offset the damage to December’s overall figure.

Naismiths managing director Blane Perrotton says: “Few sectors have seen the economic brakes slammed on as hard as construction.

“Labour shortages and rising material costs are eating into margins, and intense competition for the little work that is being put out to tender is forcing contractors to bid painfully low.

“Among developers, the sense that a messy ‘no deal’ Brexit is now a very real danger has choked off demand, and where investment can be deferred, it is.

“Barring an improbable, miraculous resolution to Britain’s Brexit deadlock in coming weeks, this painful inertia is set to continue.”

Thistle Finance manging director Mark Dyason adds: “While London and the South East are paying for excessive price inflation, in other areas of the UK demand for property is stronger and developers can still shift units and make a margin.

“Like many other sectors of the economy, construction will be on red alert as we approach 29 March. The hope is that the structural supply deficit will continue to serve as a hedge for developers and keep them ticking over.”



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