Falling Commercial Work Hits UK Construction

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Falling Commercial Work Hits UK Construction

Falling Commercial Work Hits UK Construction

The UK’s construction sector appears to be undergoing a sustained period of falling workloads, with the latest data from the IHS Markit/CIPS UK Construction PMI revealing that there was a further marginal reduction in construction output in March.

Although the index climbed slightly last month, reaching 49.7, it still remained below the 50 no-change level. In February it posted a level of 49.5, so there has been small progress month-on-month.

However, the researchers pointed out that this is the first time since March 2016 that the construction sector in the country has recorded back-to-back falls in output levels.

Although residential construction activity increased in March, the decline in commercial and civil engineering work more than offset this.

It’s commercial construction that has experienced the biggest decline though, falling to its lowest level since March 2018, when bad weather severely disrupted not only the construction sector, but many businesses in the UK.

Brexit is once again being named as the main reason behind the fall in work, with many clients choosing not to take the risk of committing to large construction projects while the outlook for the country’s economy is so uncertain.

Duncan Brock, group director at the CIPS, commented: “The fault of this continuing inertia was placed squarely at the feet of Brexit.”

He added: “Not a small rise in job creation, optimism and new orders, nor resilient house building, were enough to buck the underlying downward trend in a sector suffering from client hesitation and consumer gloom.”

Mr Brock’s comments were supported by those made by Joe Hayes, economist at IHS Markit, who noted that business confidence was below its “long-run average” as a result of the uncertainty in the country’s political and economic arenas.

Mr Hayes also pointed to the continuing efforts by construction firms to stockpile supplies ahead of any disruption that may be caused by Brexit. This had the result of constraining supply chains and means that average input lead times increased.

Brexit is causing all kinds of headaches for those working in the construction sector, not least because of the stall in work while companies cautiously approach the new deadline for the country leaving the EU.

Last month, a report from the Royal Institution of Chartered Surveyors (RICS) stated that, should the UK lose access to the single market when it leaves the EU, the construction sector could see as many as 200,000 construction workers from the EU leave.

That equates to eight per cent of the workforce in the industry, and could further exacerbate the skills shortage being experienced in the country’s construction industry.

Jeremy Blackburn, head of policy at RICS, called on the government to add a host of construction roles to the UK Shortage Occupations List, to ensure EU nationals are able to continue working in the UK following Brexit even if we leave the single market.

Without preparing for this, the country could see its pipeline of infrastructure projects grind to a halt, he explained.

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