UK Construction Increases In November

The UK construction sector enjoyed the largest monthly growth in November since January 2019.

According to recent Office for National Statistics (ONS) data, the 1.9% increase in construction activity in November was the single largest increase since the 2.4% increase in January 2019.

The data will also be a welcome relief, going some way to recover from the 2.2% fall in October 2019.

November’s growth was made up from a 2.4% rise in new work.

Three month on three month construction growth increased by 1.1% overall.

In September to November, new work rose by 1.6%, with infrastructure and private commercial new work increasing by 3% and 1.8% respectively.

However, Brexit and political uncertainty in the quarter running up to the general election had a clear impact on private residential new work, falling 6.1% when compared with November 2018 and dipping by 1.9% in the three months to November when compared with July-September’s new work.

Despite the fall in construction new work in October, November’s private housing new work continued to fall by an additional 2.6% when compared with October’s data.

Andy Sommerville, Director at Search Acumen, commented: 

“The UK construction industry stands on a threshold – advancing forwards to achieve new heights or slipping backwards to stagnation. Growth has been slow, but the UK construction market still stands tall in Europe. While the volume of construction orders has advanced only incrementally in the past year, the value of orders is at an all-time high and so is the number of construction firms in operation.

”The new found clarity over the political situation has started to provide some necessary reassurance but we also need decisive action to ensure we take a step in the right direction. Space will always be a premium in the UK, especially in the biggest cities. Data led solutions can give us powerful insights into what land is available and how best to use it. The UK’s construction industry is world leading. Let’s have the confidence to step forward and use the tools at our disposal to seize the opportunities ahead.”

Neil Knight, Business Development Director, Spicerhaart Part-Exchange & Assisted Move, said:

“The figures released before Christmas suggested that construction was flattening off in the private sector. While the latest data are an improvement on last month, overall volumes are similar to the same time last year.

“As a result of last month’s general election, there is now much greater political certainty. We’re already seeing a strong start to the year, and we’d expect to see confidence returning to the market throughout 2020.

“That will take a while to feed through into more positive output figures though, so we wouldn’t expect to see an immediate improvement.

“It’s not just about confidence: now that we have a government with a stable majority, it would be good to see some evidence of a long-term strategy to tackle some of the problems in the housing sector. The Budget in March will be an opportunity for the Government to show that it gets this.”

Brian Berry, Chief Executive of the FMB, said:

“While 2019 was a year marked by political and economic uncertainty, there does seem to be some small signs of hope for the construction industry, with the largest monthly growth in the industry seen in November since the start of the year. It is too soon to tell whether this will be a longer term trend, as some sectors such as private house building and repair and maintenance continue to see sluggish growth.”

“The upcoming Budget provides the perfect opportunity for the Government to help ensure this positive trend at the end of 2019 continues into the new decade. In order to help boost the industry, the Chancellor should prioritise cutting VAT on home improvement works, so that tax isn’t a barrier to homeowners upgrading the energy efficiency of their properties.

“The Government should also use the Budget as an opportunity invest in construction skills to help build the homes and infrastructure we need, and invest in planning departments to ensure the planning system doesn’t act as a blockage to the Government’s ambitious housing targets.”

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