Construction returns to growth as output climbs in Q3

11 November 2019 | By Neil Gerrard

Construction output in the third quarter (July to September) reversed declines seen earlier in the year and grew by 0.6%, according to the latest official figures.

The growth in Q3 was driven by a 1.4% increase in new work, offset slightly by a fall in repair and maintenance of 0.8%, according to the Office for National Statistics (ONS).

Private housing saw a 1.8% increase in new work, private commercial enjoyed a 1.5% uptick, and private industrial rose by 7.2%.

But in repair and maintenance there was a 3% decline in private housing and a 0.3% drop in non housing.

The figures compare favourably to Q2 (April to June), when construction output dropped by 1.2%.

Caroline Gumble, chief executive at the CIOB, commented: “It’s good to see that there is growth in the sector, albeit at a slower rate than earlier in the year. The CIOB has recently written about what we believe the industry needs from the next government. In order to maintain stability within the sector we want to see leadership and commitment at a Ministerial level, support for the industrial strategy and further investment in the regions. Securing a pipeline of well-planned projects and supporting jobs across the UK should be a priority for the next government, and based on today’s figures, pursuing these strategies will lead to all around improved economic performance.”

Mark Robinson, chief executive of procurement body Scape Group added: “It’s very promising to learn that new work increased by £253m over the third quarter of this year despite the prolonged period of political turmoil. Particularly after months of construction output contracting. But while the UK has avoided a recession by the skin of its teeth, there is still a long way to go until we experience any kind of bounce back in business optimism and we still need to see the government seriously commit to propping up industry skills and funding in the lead up to January 31st and beyond.

“Both Sajid Javid and John McDonnell have committed huge amounts of money to infrastructure spend over the past few days, but this ‘war on spending’ has highlighted the huge disconnect between both parties and what is happening on the ground. ‘Shovel ready’ projects take years to prepare and snap decision-making will likely see us making unwise commitments to projects that will become unviable down the line.

“The incoming government needs to take a holistic view when assessing projects to ensure that they are high quality and cost effective, and importantly deliver social value for our communities. Both Chancellors should focus on rectifying the stop-start nature of project work and commit to completing current infrastructure projects, such as Crossrail and HS2.”

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