Breaking news
A drop in unique work and miserable infrastructure activity contributed to falling UK construction output in December final 12 months, based fully on the most contemporary professional figures.
The field contracted by 0.5 per cent in December in comparison with November, with a complete fee of £15.25bn, Situation of industrial for National Statistics (ONS) knowledge shows.
Bid of 0.4 per cent in repair and maintenance failed to offset a 6.4 per cent drop in infrastructure unique work, which contributed to a 1.1 per cent decrease in total unique work in December.
Clive Docwra, managing director of property and construction consultancy McBains, stated: “At present’s figures signify a critical blow for the construction trade, coming off the aid of two earlier months of falling output.”
He added: “It’s now crunch time for the sector with the UK economy entering recession in the closing quarter of final 12 months. In recent months a drop in unique housebuilding has been a limiteless ingredient in the decrease in enhance, but this day’s figures show camouflage unique infrastructure work – which for a long while has propped up the sector – also drying up.”
In contrast, Kelly Boorman, companion and national head of construction at RSM UK, stated: “The trade remains cautiously optimistic attributable to dedicated employ on infrastructure projects, with companies also reporting that the pipeline has grown attributable to unique projects being awarded”.
In quarterly terms, construction output fell by 1.3 per cent in October-December – an comparable to a £599m decrease in output – in comparison with Q3 final 12 months. The ONS attributed this to a 5 per cent drop in unique work.
On the opposite hand, repair and maintenance increased by 4 per cent in comparison with Q3.
In its statistics launched this day, the ONS stated that “anecdotal proof” means that detrimental weather in Q4 used to be a contributing ingredient in the aid of the total decrease in output.
It added: “Proof also means that these weather effects ended in increases in repair work across the repair and maintenance sectors.”
Four out of the 9 sectors assessed by the ONS skilled a decline in Q4 final 12 months. Personal-housing unique work used to be the worst performer with a 1.2 per cent drop in comparison with Q3, adopted by infrastructure (-1.2 per cent). Original work in the personal commercial and personal industrial sectors fell away marginally, with decreases of 0.29 per cent and 0.02 per cent respectively.
The ONS also produced fleshy-12 months statistics for the construction sector, showing that annual output grew by 2 per cent in 2023 – the third consecutive 12 months of enhance.
On the opposite hand, total unique orders in Q4 decreased by 13.1 per cent (£1.36bn) in comparison with Q3.
The ONS stated that the quarterly drop got here primarily from the personal commercial and industrial sectors, which decreased by 18.1 per cent (£542m) and 27.6 per cent (£320m) respectively.
Restore and maintenance performed better with enhance of 11.3 per cent.
Mike Hedges, firm operations director at Beard, stated: “Right here’s as considerable driven by the economic local weather and tougher borrowing conditions because it is the shifting focal level among a selection of our prospects to prioritise the arrive of present constructing property.
“While we personal viewed a selection of certain indicators which has helped boost confidence, there’s no question inflation silent remains a key barrier to enhance.”
Basically the most contemporary figures show camouflage that construction inflation (“output label enhance” in ONS terminology) grew by 3.1 per cent in 2023, reflecting a slower rate of label enhance since the 10.7 per cent height skilled in Could well also and June 2022.
No topic this, Docwra stated: “While hobby charges remain excessive and the economic image continues to be unpredictable, we inquire of the total outlook for 2024 to be one of uncertainty.”
