Housebuilding activity sees biggest fall in three years

An increasingly tough housing market has caused the largest drop in residential activity for three years, according to new data. 

The latest data survey by IHS Markit/CIPS reported that housebuilding activity fell sharply in October. 

Speaking about the latest figures Jan Crosby, UK head of infrastructure, building and construction at consultant KPMG, said there was “widespread evidence of a sluggish housing market, which is likely causing some housebuilders to slow build rates on sites - particularly those not benefiting from Help to Buy”. 

Slowing orders were also forcing construction firms to cut staff numbers, according to the IHS Markit/CIPS data.

Staffing levels fell again in October after declines every month since April, with softer demand compounding a lack of new activity to replace completed jobs. Firms also cited a failure to replace EU-citizen workers who had left the UK in the run-up to Brexit.

While the rate of the new work decline was the slowest for three months, firms were still battling hard for jobs, to the extent they were prepared to offer heftier discounts in order to land projects.

IHS Markit/CIPS’ PMI index reported a score of 44.2, up on September’s 43.3, but still nowhere near the 50 mark, which indicates no change.

Brian Berry, the chief executive of the Federation of Master Builders, said that after the most recent delay to Brexit “the spectre of uncertainty continued to haunt the construction industry”.

With a general election just over a month away Berry said political parties “should provide clear and unambiguous support for business and back this up with pro-enterprise policies”.

And Scape chief executive Mark Robinson urged politicians to think of the UK’s infrastructure needs.

“Roads, schools, hospitals and houses are the linchpins of society, so whichever party prioritises them will win over the hearts and minds of the people,” he said.