Warning signs as construction output flat-lines

Published:  13 December, 2018

Rising costs and continued uncertainty over Brexit are to blame for the drop in construction output, according to the Federation of Master Builders.

The latest figures from the Office for National Statistics showed that construction output decreased by 0.2% in October 2018 compared with strong growth of 1.7% in September 2018.

The decrease in October 2018 was driven by declines in infrastructure (down 3.7%), public new housing (down 8.1%) and total repair and maintenance (down 0.8%). Private new housing grew by 2.4%.

Sarah McMonagle, Director of External Affairs at the FMB, attributes this “flat-lining” to rising costs for both large and small construction firms, due to increased wages, because of the skills shortage, and higher material prices.

She said that the depreciation of sterling following the EU referendum has meant that key materials have become more expensive, and that FMB research shows that almost 90% of builders expect prices to continue to rise in the next six months.

McMonagle added that the future is uncertain for construction industry due to Brexit, as the government intends to limit the numbers of low skilled workers entering the country from the EU. This would have a big impact on the industry as according to the Office for National Statistics, 7% of the UK’s construction workers are from the EU, and this rises to one third in London.

She said: “It is therefore imperative that the government listens to the needs of the sector and delivers a post-Brexit immigration system that allows us to draw on essential migrant workers.

“Without this, we won’t be able to keep building at the current rate and construction output will continue to fall.”

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