Housing output gives construction sector a New Year boost

Housebuilding proved to be a fillip for the construction sector in January, but while the latest ONS output growth numbers showed an overall rise of 2.8% industry figures warned the turnaround could be temporary.

The Office for National Statistics reported that overall output grew by 2.8% in the first month of 2019, reversing the 2.8% decline seen in December 2018 and 1.8% higher in 2019 than the same month a year earlier.

Public new housing output rose by 5%, data hailed as “very promising” by Mark Robinson, chief executive of framework firm Scape. Robinson said he hoped today’s Spring statement by the chancellor of the exchequer would enact an element of reform of the planning environment.

Arguing that Theresa May was taking matters to the wire over Brexit, Robinson said: “There are just days left to finalise a deal. With no time to tie up loose ends the, and zero clarity on how the UK can continue to assess essential construction talent from the EU, the industry will likely be left in the lurch.”

Blane Perrotton, managing director of consultants Naismith, said the good news around housing output could prove to be a temporary reprieve. “The combination of Britain’s housing crisis, low interest rates and developer-friendly incentives like Help to Buy is propping up residential demand and keeping the orders coming in.

“But on the front line, work on residential projects is easing off, as contractors increasingly have gaps between completing one job and moving onto the next,” Perrotton added.

The more indicative three-month-on-three-month series from the ONS showed an overall dip in output of 0.6% in January, driven by a fall in RMI work.