October鈥檚 drop in output was mainly down to a 3.1% fall in new work; repair & maintenance output decreased by a more modest 0.6%.
The latest bulletin from the Office for National Statistics also shows a 0.3% drop in construction output for three months of August to October 2019, compared with the previous three-month period. This was driven by a fall of 1.4% in repair & maintenance, with a smaller positive contribution from 0.3% growth in new work.
In repair & maintenance, the fall in the three months to October 2019 was largely because of the 3.6% decline in private housing repair and maintenance, with public housing repair and maintenance also falling 0.8%.
Total construction output reached 拢13,322m in October 2019, which is the lowest it has been since April 2018 when output was 拢13,180m.
The ONS statisticians report that there was anecdotal evidence from a number of survey respondents that bad weather in October had an impact on output 鈥� 鈥渁lthough it is difficult to quantify the exact impact on the industry,鈥� they said.
Industry comment
Gareth Belsham, director of the national property consultancy and surveyors Naismiths, said: 鈥淭wo steps forward, one big step back. After a surprisingly buoyant third quarter, Britain鈥檚 builders slipped back into decline in October. The largest month-on-month fall in nearly two years all but wiped out the steady gains made in Q3, dragging the industry back to its painfully familiar pattern of stagnation.
鈥淪uch an abrupt fall in new work is particularly worrying, and suggests contractors simply don鈥檛 have enough new jobs to replace completed projects.
鈥淲hile new orders held steady in the third quarter 鈥� a marked improvement on the wasteland of Q2 鈥� order books are now getting worryingly thin. Warning lights have also come on in the residential sector. Housebuilders have long been the standard bearers for the construction industry as a whole, but even they saw output slide badly in the three months to the end of October.
鈥淭he industry鈥檚 prospects now look as finely balanced as Thursday鈥檚 election. A decisive result should finally bring some clarity to the market and shake it out of its slumber, but for now many investors are opting to defer decisions, starving contractors of demand and keeping the industry trapped in its light-headed inertia.鈥�
Scape Group chief executive Mark Robinson said: 鈥淥ctober marked another dreary month for the construction industry as it experienced the largest monthly fall in growth in almost two years and total output fell by a very significant 拢309m.
鈥淭he industry has been spiralling towards a recession since the Brexit vote and it can only take so much more bad news. A lack of clarity over immigration and trade policies, as well as ongoing economic uncertainty, has forced construction bosses across the country to pause existing projects and hold off on making decisions on new work, which is evident through the large falls in repairs and maintenance, infrastructure projects and private housebuilding revealed today.
鈥淗owever, the general election outcome does have the potential to create a bounce back in activity in the New Year, so the industry will be holding its breath for a new Government which has a clear mandate to implement a fiscal strategy and one that can make clear and concise decisions that will provide clients and construction firms with the confidence to press ahead with projects. However, on the flip side, a hung parliament could send the industry into further instability and disarray.鈥�
Got a story? Email news@theconstructionindex.co.uk
