UK Construction Output Falls

UK Construction Output Falls

Although there is a strong government focus on house building in the UK, construction output in the country contracted in the three months to November 2017, the latest data shows.

Figures published by the Office for National Statistics (ONS) revealed that construction output dropped by two per cent in the three months to November, compared to the previous three-month period.

This is the biggest contraction experienced in the sector since August 2012, with the organisation explaining that the three-month on three-month data is more effective at identifying underlying trends, than the month-on-month information.

However, the ONS did note that there was a month-on-month increase in construction output in November, which posted a 0.4 per cent increase.

Earlier this month, the latest Markit/Chartered Institute of Procurement & Supply (CIPS) UK construction purchasing managers’ index (PMI) found that residential house building projects were supporting the industry, with commercial projects and civil engineering work “stagnating”.

In fact, residential construction expanded for the 16th consecutive month, the UK construction PMI found, with respondents to the survey citing this as the key area of growth for the sector.

Another positive finding from the Markit/CIPS UK construction PMI is that new orders grew at their fastest pace in seven months in December. This is good news for the short-term outlook for the sector, the report noted.

However, associate director at IHS Markit Tim Moore stressed that this isn’t necessarily an indicator of long-term success.

“Construction firms indicated that longer-term business confidence is still relatively subdued, largely reflecting concerns about the domestic economic outlook,” he asserted.

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