Construction down again
3rd December 2019

UK construction activity fell again in November for the eighth month in succession – the longest unbroken decline since 2012-3 – though the pace of decline was the slowest for four months, according to the latest IHS Markit/CIPS UK figures published today.

However, housing and commercial construction were the least hard-hit, with civil engineering bearing the brunt of the decline, according to the report, which it attributes to a lack of new work as well as exceptionally wet weather, but inevitably coupled with the ongoing political uncertainty.

It also cites side effects including increased price-cutting and non-replacement of voluntary leavers.

It continues: “Looking ahead, construction companies remain relatively cautious about their prospects for growth over the course of 2020. The degree of business optimism was little-changed since October and still much weaker than its long-run average.

Reports from survey respondents suggested that this largely reflected concerns about the domestic economic outlook and worries that political uncertainty will continue to hold back client confidence.

It adds that: "House building has been the most resilient category of construction output in 2019. However, it remains a concern that overall volumes of residential building work have dropped in each month since June, which is the longest phase of decline since the start of 2013.”

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, said: "Brexit uncertainty, an impending General Election and wet weather all combined to keep the construction sector firmly in its contraction hole last month with purchasing, output and new orders falling again.

"Construction firms have not seen dwindling new orders for this length of time since 2013, as clients continued to defer spending large and small, citing political indecision as the cause of their non-committal. Preferring to hold on to cash reserves rather than spend in the current climate, this also translated into tighter job hiring strategies. Employment levels were cut again in November, and contributed to the longest period of job shedding for more than eight years.”