August 2015: UK construction statistics update

According to the Office for National Statistics, output in the UK construction industry was estimated to decrease by 4.3% in August 2015 compared to July 2015, and 1.3% compared with August 2014. This represents the first year-on-year fall since May 2013. All work types saw a decrease in the month-on-month growth rate, with the main contribution to the fall coming from Repair and Maintenance, where all work types reported decreases.

In the June-August 2015 period, construction output fell by 0.8% compared to the previous three-month period (March-May). Repair and Maintenance fell by 3.6%. All new work on the other hand, increased by 0.7%, with all work types except public housing and public contributions contributing to the year-on-year growth rate for new work.

The Quarterly National Accounts published on 30 September included an upward revision of the estimated construction output for 2Q15 of 1.4% compared to 0.2% in their earlier second estimate. Both are consistent with the Blue Book 2015. The revisions were due to a reweighting and re-referencing of the indices, as well as the incorporation of late data.

Housing output has fallen by 8.0% from its peak in April 2015, with new orders for housing showing a 2.3% decline in 2Q15 from 1Q15. This fall in orders supports a fall in new housing work.

In response to the figures released in August, Stephen Wasserman, director of West One Loans, said:
“In a week when we have again heard the Prime Minister address the UK’s housing shortage, the statistics show that, as a nation, we are talking the talk but failing to walk the walk. Construction activity is not only down on a monthly basis, but has fallen on an annual level for the first time in more than two years.

“David Cameron’s pledge earlier this week to build 200,000 starter homes by 2020 was welcome news on the face of it, but it’s a drop in the ocean when you consider we actually need that number of new homes on an annual basis to address the supply shortage that has plagued the nation for decades.“One of the most interesting aspects of Cameron’s speech was the flexibility that will be given to developers in terms of affordable housing obligations, but for many builders it is funding that has long proved the obstacle. Bridging lending in particular has long proved a valuable source of short-term finance for developers securing land and getting projects off the ground, but mainstream providers need to step up to the plate too.”

Owen Goodhead, managing director of specialist construction recruiter, Randstad CPE, also responded, commenting:
“Britain is facing a skills shortage – putting our homes, infrastructure and economy on the line. Construction in the UK could be expanding instead of retreating if the right people were in the right jobs. But training, skills and flexibility need to accelerate hugely for construction jobs to keep up with demand.

“Huge schemes – like High Speed 2 and the Thames Tideway – are on the horizon, and we face a generational challenge to build enough homes. If we as a country don’t have the sheer volume of knowhow that’s needed, these projects are more likely to overrun – and political visions of building Britain’s future are more likely to flounder.

“The PM championing the tech sector is important but the construction industry also needs the Government’s time and energy. Without it, all the Chancellor’s talk of investment in infrastructure will come to nothing. We are seeing the very real effects on the industry of the 5 year skills gap which will only increase unless we start attracting new people now.”

Edited from sources by Rebecca Bowden Source: ONS, Randstad CPE

Read the article online at: https://www.worldcement.com/europe-cis/09102015/august-2015-uk-construction-statistics-update-745/