Industry figures demand government action after construction output slump

Leading figures from the construction sector have urged the government to commit to boosting infrastructure projects and house building activity after new construction output data showed a slump in output.

Construction output fell in May by 1.2%, both month-on-month and measured by three month-on-three month periods, according to new data from the Office for National Statistics (ONS).

The decrease in the latter represented the sharpest fall in output over such a period since September 2012, driven by falls in both repair and maintenance, and all new work. The main downward pressure on month-on-month growth came from all new work, most notably from infrastructure, which fell 4% following strong growth in April.

All new work, which accounts for two thirds of output, fell for the second consecutive month, dropping 1.4%, while repair and maintenance fell for the third consecutive month, falling 0.7%.

Construction output also fell month-on-year, falling by 0.3% in May 2017, the first consecutive month-on-year decrease in output since May 2013. However the ONS said construction output for April 2017 has been revised up 0.5 of a percentage point, from negative 1.6% to negative 1.1%.

Mark Robinson, chief executive of Scape, said: “Theresa May’s election gamble has so far been a disaster for the construction industry. The run-up to the general election saw the largest three month drop in construction activity in five years, and most worrying was the lack of new work in the infrastructure sector.

“The reality of a vulnerable minority government is that the uncertainty around big projects could continue for some time.”

Commenting on the latest figures, Michael Thirkettle, chief executive of McBains Cooper,said the month-on-month declines was “extremely unwelcome news for an increasingly fragile looking construction industry.

“The new government needs to ensure that housebuilding is at the top of its agenda, so at least there were encouraging signs this week with the proposals from Communities Secretary Sajid Javid for local authorities of wealthier areas to have their housebuilding targets reviewed to help alleviate the housing shortage.”

Thirkettle also called for the streamlining of existing planning laws, greater investment in public projects, “and ensuring that the industry has enough skilled labour to meet housebuilding targets, which won’t happen if the government clamps down on the use of skilled migrant workers from abroad”.

Earlier this week Sajid Javid called on local authorities to pitch for cash available through a new £2.3bn infrastructure fund, which he said could unlock the potential to build more than 100,000 new homes.

Funding would also be available to help build new schools, healthcare centres and digital infrastructure to accommodate growing communities and alleviate pressure on public services, Javid said.