Growth in UK Construction Output Despite Bad Weather

Quarterly and monthly all work index, November 2014 to November 2019 seasonally adjusted

UK CONSTRUCTION OUTPUT ROSE by 1.1% per cent in the three months to November 2019 on the back of growth in new work, particularly in infrastructure and private commercial.

New work rose by 1.6%, with repair and maintenance growing by 0.2% compared with the previous three months.

Output is up 1.4% with new work up 2.7% and repair and maintenance down by 0.9% compared with the same three months year before.

Three-month on three-month construction growth for September to November 2019 compared with June to August 2019, seasonally adjusted

Looking beyond infrastructure for the three month period, the only two sectors to decline were private new housing, down by 0.4% and private housing repair and maintenance, down 1.9%.

Within the quarter and on a month-to-month basis, there was a 1.9% rise in output in November 2019. October saw a fall of 2.2%, with many respondents reporting they were affected by adverse weather.

General election

The result of the general election and the resulting clarity and stability could encourage some developers to take decisions in the early part of 2020 that were put off in 2019.

Gareth Belsham, director of the national property consultancy and surveyors Naismiths, said, “Fragile confidence, weak demand and contractors running out of orders – it’s all there. Rising output in infrastructure and commercial construction was tempered by a contraction in private sector housebuilding.

“Yet the month-on-month increase, which jumped to 1.9% – the highest level since January 2019 – gives a hint of the rebound that has followed the election.

“Such a clear election result and an end – for now – to Brexit uncertainty have helped the industry to reset. The return of clarity, if not yet unbridled confidence, is prompting many developers who spent 2019 sitting on their hands to pull the trigger in 2020.

“The industry is far from back to health, but in the space of less than a month, its newfound sense of purpose is starting to make these November figures seem very distant.

“The questions now will be how long the Boris bounce can sustain, and whether the capacity-cutting of last year will hamper contractors’ ability to cope with a rise in demand.”

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