Construction output suffers another dip – ONS

building stock 2Output in the UK’s construction sector fell 1.3% in the three months to June, after a 1.1% rise in the first quarter, the Office for National Statistics (ONS) has revealed.

The 3 month on 3 month decrease was driven by a 1.3% drop in new work and a 1.4% fall in repair and maintenance, the fourth consecutive month the figure has dropped.

Month-on-month construction output also fell in June 2017, contracting for the third consecutive month, decreasing by 0.1% compared with the previous month; however, construction output still grew 0.9% compared with June 2016.

The month-on-month decline of 0.1% in June 2017 was driven by a 1.1% fall in all repair and maintenance; however, this was offset by a 5.1% increase in private housing, which reached its highest level on record.

Two large contractors were bullish about their prospects despite the fall in output.

Kier Construction Scotland’s business development manager, Gordon Reid, said: “Although figures have dropped this month, recent reports on the bigger picture point to the industry being stronger and more resilient than ever and this is certainly what we are seeing at Kier Construction Scotland.

“Health and education are key sectors for Scotland and we have recently strengthened our portfolio in these areas.

“Our recent wins support our strategy for growth and as a result we have been able to expand headcount and continue to attract a diverse range of new talent to Kier. The construction industry remains resilient and in good health and we will continue to showcase the breadth of career opportunities and highlight the huge benefit that this important sector delivers to the Scottish economy.”

Allan Callaghan, managing director of Cruden Building & Renewals, added: “The house building sector in Scotland has endured some big challenges this year including the impact of Brexit, the rise in materials like brick and timber and the fall of Sterling.  However, the sector remains buoyant and very resilient. At Cruden, we have secured a number of significant contract wins over recent months and we continue to see high demand at our new housing developments.

“The sector is a major employer in Scotland and plays a big part in addressing youth employment. The issue of labour and resource shortages in the short to medium term needs to be addressed.  At Cruden we have met these challenges head on – setting up the Cruden Academy to deliver best practice in training and education as well as expanding our award-winning modern apprenticeship programmes to invest in our skills and our people.”

ONS records largest dip in construction output for five years

building stock 2Output in the UK construction sector fell by1.2% in May 2017 in both the month-on-month and 3 month on 3 month time series, new figures have shown.

The three-month on three-month decrease represents the largest fall in output recorded by the Office for National Statistics (ONS) 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 4.0% following strong growth in April 2017.

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.

The ONS has now revised construction output growth for April 2017 upwards by 0.5 percentage points from minus 1.6% to minus 1.1%.

Despite the dip in output, the Scottish division of partnership housing developer Lovell said May was “a particularly busy month” for the firm.

Commenting on the figures, regional managing director for Lovell in Scotland, Stephen Profili, said: “May was a particularly busy month for Lovell in Scotland with a total of 23 separate projects underway located throughout the central belt. These included three sites that reached completion during that month and a further two projects that completed pre-construction and moved into the proper building phase.

“Overall construction output figures show a mixed picture but the underlying performance of the new housebuilding sector of the industry gives us continued reason to be optimistic about the outlook for the remainder of 2017. Lovell remains on track to complete more new homes this year than in any previous year, the majority of which will be affordable housing.”

Likewise, Allan Callaghan, managing director of Cruden Building & Renewals, added: “A dip in output is disappointing, but the housebuilding sector is resilient and continues to make a strong contribution to the construction industry.

“With the changes to the Scottish Government’s planning system coming into effect just last month, I hope that the substantial increases in fees are reinvested into planning services, leading to greater performance and output.

“We need an effective and delivery-focused planning service that allows house builders and developers to keep building the new homes that Scotland desperately needs and drives greater investment, growth and jobs.”

April sees UK construction output drop as first quarter revised upwards

King's View AerialOutput in the construction industry fell 0.6% in the three months to April, driven mainly by a 0.9% fall in all new work, according to new figures from the Office of National Statistics (ONS).

The fall, which represents the first three month on three month drop in construction output since September 2016, was largely due to a 2.6% decrease in infrastructure, which dropped for the first time in six months, as well as a 1.1% drop in private housing.

Construction output also fell month-on-month in April 2017, dropping 1.6%; driven by falls in both repair and maintenance, and all new work.

The fall in all new work in April 2017 was somewhat offset by a sizeable rise in infrastructure, which grew by 5.7% compared with March 2017.

The ONS also revised the data for Q1 (January to March) 2017 increasing from 0.2% to 1.1%, leading to a 0.05% revision to gross domestic product (GDP).

The Scottish division of partnership housing developer Lovell said the figures show the country’s housebuilding sector is making a strong start to 2017 with a rise in new orders for private housing.

Regional managing director for Lovell in Scotland, Stephen Profili, said: “These latest figures suggest the UK construction industry has made a strong start to 2017 and that a buoyant housebuilding sector in particular is making a major contribution to that strong performance.

“April was a good month for Lovell in Scotland with construction getting underway on a number of projects and others approaching completion, putting us well on track to meet our expectation of delivering around 450 new homes during 2017, most of them affordable housing. This will be an increase of more than 60% on the number of new homes Lovell completed during 2016.

“Notwithstanding the increased uncertainty prompted by the outcome of this week’s snap general election, there are promising signs that 2017 is shaping up to be a year of strong growth for the housebuilding industry, in Scotland and across the UK.”

Allan Callaghan, managing director of home builder Cruden Buildings and Renewals Ltd, said: “A decrease in output figures is not entirely unexpected, given some of the wider economic and political uncertainty currently ongoing, however at Cruden we are still experiencing strong demand for house building.

“However, whether or not output is rising, the ongoing skills shortage remains a crucial challenge and one that the industry and the government need to work together to address. Without skilled labour we cannot increase output to the levels needed to tackle issues such as the housing gap.

“That’s why at Cruden we have taken the decision to proactively address this, and have recently doubled our intake of first year apprentices and grown our modern apprenticeship programme to over 70.  This, combined with our Cruden Academy – a continuous programme of investment in employees’ lifelong learning, training and distance support, as well as further education support – means that we will have a pipeline of talented and skilled employees to help us meet any challenges, and opportunities, the future might present.”

Derek Shewan, chief operating officer of Robertson Group, added: “It is disappointing to see a further decrease in output across the construction industry. When times are tough, there can be a tendency for businesses to become overly cautious, but I believe the best approach is to focus on becoming more innovative and productive. At Robertson Group, we have remained resilient across our 22 businesses precisely because innovation is at the heart of our approach.”​

Construction output falls for third month in a row

Kier construction stockOutput in the UK construction sector has fallen for the third month in a row despite an increase in new housing.

Figures released today by the Office for National Statistics (ONS) show overall construction output was 0.7% lower in March, with the monthly fall worse than previous estimates.

While new housing experienced strong growth in March, increasing month-on-month by 3.8%; month-on-year by 5.4%; and quarter-on-quarter by 0.2%, the activity failed to completely outweigh lower spending on infrastructure, repairs and maintenance.

The quarterly figure was somewhat brighter, with output up 0.2% during the first three months of the year.

In comparison with the same period in 2016, construction output grew by 2.4% in March 2017, representing the 12th consecutive period of month-on-year growth.

Repair and maintenance was the main drag, shrinking both month-on-month and quarter-on-quarter by 1.8% and 0.2% respectively. Spending on infrastructure fell by £78m.

Partnership housing developer Lovell said the figures underline the continued strengthening performance in house building in Scotland and throughout the UK.

Stephen Profili

Stephen Profili

Recently appointed regional managing director for Lovell in Scotland, Stephen Profili, said: “2016 was a good year for the house building sector in Scotland with public and private sector output both up year-on-year, as was repair and maintenance activity in the housing sector. For its part, Lovell built 277 open market and affordable homes in Scotland last year. These new figures for March 2017 show promising performance for the industry during the first quarter of 2017 – and the housing sector in particular is continuing to perform strongly, demonstrating an ongoing recovery from the 2008 recession.

“Lovell is gearing up for a busy year with a strong pipeline of projects across central Scotland approaching completion and ready to launch for sale in the coming months and a number of others entering the construction phase. Working with a range of local partners, we expect to deliver approximately 450 units of new housing during 2017 including around 400 affordable homes, making an important contribution to the Scottish Government’s target to build 50,000 new affordable homes by 2021.”

Allan Callaghan

Allan Callaghan

Allan Callaghan, managing director of Cruden Building & Renewals, added: “These positive figures come at a time where the sector is traditionally at its most productive, with the longer, drier days supporting increased work on the ground.

“Housebuilding has definitely been the jewel in the crown for construction output during the first quarter and with continuing demand for modern and affordable housing across the country, I would expect this trend to continue in the coming months.

“The Scottish construction sector has faced many challenges but those operating in the industry have the drive, desire and talent to face them head on. Now is the time for the housebuilding sector to make hay while the sun shines, driving future construction growth and ensuring we see positive statistics in the coming months.”

Construction output continues upward trajectory despite February dip

Figure 1- Rolling 3 month and monthly all work, February 2017Output in the UK construction sector fell in February with a 7.3% decrease in infrastructure providing one of the main downward pressures, the latest figures reveal.

Sharp falls in infrastructure and as well as new private housing saw UK construction output dip 1.7 per cent in February, its biggest drop in almost a year, according to Office for National Statistics (ONS).

All new work fell by 3.3% in the second month of the year after growing by 0.7% in January.

The fall in all new work was driven by the first month-on-month drop in infrastructure since October 2016, which decreased by 7.3%, and housing, which fell for the second consecutive month by 2.6%.

There was also a fifth consecutive month of negative growth in private industrial other new work, which decreased by 4.7%.

Despite the February decrease, construction output grew by 1.5% in the past three months when compared with the previous quarter, driven mainly by strong growth of 2.2% in infrastructure and 0.6% growth in repair and maintenance.

Brian McQuade, managing director of the Scotland and north-east England arm of Kier’s Construction division, said: “Although figures have dropped this month, the bigger picture points to consistent and strong growth within the industry and we’re now entering the second quarter of the year which traditionally sees an increase in activity. Kier has also announced a solid set of half-year financial results where we have grown our business, expanded our order book and secured a robust pipeline of activity.

“Health and education remain important sectors for Kier Construction Scotland. Recently we have been appointed to work through the development proposals for the £5m Rowanbank secure health unit at Stobhill Hospital through the Health Facilities Scotland Framework for NHS Greater Glasgow and Clyde. We have also been appointed by hub South West to develop the design and build for the new £25m Queen Margaret Academy in Ayr on behalf of South Ayrshire Council.

“There are at least £750m of funded projects coming up for tender across Scotland in the next six months so there are plenty of opportunities available to attract a diverse range of new talent to the industry. We will continue to focus on showcasing the breadth of career opportunities that the construction industry has to offer, and highlight the significant boost that our sector delivers to the Scottish economy.”

Allan Callaghan, managing director of Cruden Homes, said: “This month has shown a significant dip but the overall outlook points to a brighter picture of growth for the fourth consecutive period.  This reflects the results we’re seeing in our own business, where phase one of our Baron’s Vale development in the east end of Glasgow and at our King’s View development in the south side of Glasgow have both sold out months ahead of schedule.  As a result we are bringing forward the phase two launch date at both developments to keep up with this strong market demand.

“Scotland continues to need more homes, both for private buyers and for social housing, and it is important that industry and government continue to work closely together to enable this to happen even faster.

“We are in particular looking forward to seeing the final details on Scottish Government’s updated planning legislation in light of its recent consultation, and hope the revised Bill will enable increased output and other positives for the industry.”

Scottish construction employment reaches three-year high

construction-materials stockEmployment in the Scottish construction industry closed 2016 at 181,000, an annual rise of 7% or 12,000 and the highest number employed within the sector since December 2013.

The newly updated figures have been published by the Office for National Statistics (ONS) following separate figures released last week which showed Scottish building industry output during 2016 was £14.5 billion.

Commenting on the new figures, Scottish Building Federation managing director, Vaughan Hart, said there is reason to believe that employment in the industry can continue to increase.

He said: “Following on from last week’s Scottish construction output figures, these new figures on Scottish building employment during 2016 show a year-on-year rise of 12,000 in the number of people working within the sector.

“Although positive news for the industry, it remains the case that, during 2016, every £1 million of industry output supported 12 Scottish construction jobs. By comparison, in 2007, every £1m of Scottish construction output supported 21 jobs in the sector. This reflects a shift over time in the profile of industry output, away from housing and private commercial activity and towards major infrastructure projects, which provide comparatively fewer employment opportunities.

“With strengthening performance now being seen across housing, private commercial and repair and maintenance, there is reason to hope that industry employment should continue to rise during 2017. At the same time, with so much uncertainty about future economic prospects, we will be watching carefully to see if these positive trends continue in the months ahead.”

Scottish construction output drops slightly to £14.5bn

construction worker stockScotland’s construction industry generated total output of £14.5 billion last year, a modest decline on record output of £14.7bn during 2015, according to new official figures issued today by the Office for National Statistics.

Output from the housing, private commercial and repair and maintenance sectors of the industry were all up year-on-year.

But output from the infrastructure sector of the industry declined from a record high of £4.2bn during 2015 to £3.1bn in 2016.

The Scottish Building Federation said while the figures were “encouraging”, only a reduced reliance on major infrastructure projects would ensure a continued and balanced recovery for the sector.

Scottish Building Federation managing director, Vaughan Hart, said: “There has been encouragingly strong performance from the housing, private commercial and repair and maintenance sectors of the Scottish construction industry last year. Output from the housing sector rose by 16%, largely driven by an increase in private housebuilding. The private commercial sector was also strong, rising 6% to more than £2.6bn, the highest it’s been since 2008.

“We’ve also seen good output in repair and maintenance, rising 5% to more than £4.1bn. On the other side of the equation, infrastructure output has dropped significantly and private industrial activity is at a new low, partly prompted by the removal of empty property rates relief which is a policy we have consistently campaigned against.”

Mr Hart added: “Overall, these are encouraging results which suggest that the industry is moving in the right direction in terms of achieving a balanced recovery across different sectors, hopefully with a reduced reliance on major infrastructure projects to drive future growth as other key sectors such as housing, commercial and repair and maintenance continue to show strengthening performance.

“We will be watching closely to see if this momentum continues into 2017. However, that is obviously very much dependent on how the wider economy performs and there is still a good deal of uncertainty about future economic prospects just now.”

UK-wide construction output fell by 0.4% in January 2017 compared with the previous month although output grew on a 3 month on 3 month basis by 1.8%.

All new work showed signs of flattening out with growth of 0.1% in January 2017, but continued to grow in the latest 3 months compared with the previous 3 months at a rate of 2.1%.

Overall annual construction output growth has increased for 2016, to 2.4% from 1.5%, due to upward revisions for all 4 quarters, including a revision of 0.8% in Quarter 4 (Oct to Dec) 2016, from 0.2% to 1%.

New orders fell by 2.8% in Quarter 4 of 2016, driven mainly by falls in private industrial and private commercial work.

Despite new orders falling in Quarter 4 of 2016, the annual volume of new orders is now at its highest level since 2008.

With Scottish Apprentice Week finishing today, Allan Callaghan, managing director of housebuilder Cruden Homes West, responded to the statistics by urging the sector to continue to keep recruiting and developing young people to build a skilled and talented workforce.

Mr Callaghan said: “It’s encouraging to that annual construction output has increased to 2.4% as this sector continues to play a vital role in supporting Scotland’s economy. However, we can’t ignore the fact the sector is suffering from an ageing workforce with widening skills gaps.

“This week’s Scottish Apprentice Week has put a spotlight on the value of apprenticeships to construction employers. It’s vital that we continue to keep recruiting and developing young people to build a skilled and talented workforce.

“We desperately need to build more new, affordable houses and, with the requirement for over 12,000 new workers over the next five years, there’s never been a better time to encourage young people into this thriving sector.

“Much more than hard hat jobs, it’s a flourishing industry that is home to varied careers including engineering, surveying, marketing, architecture, planning and much more.

“At Cruden, we’re about to begin the process of recruiting 15 new apprentices and they will become part of the 50 strong team of apprentices that we train every year. Employers of all sizes need to play their part in changing perceptions of a career in construction and showcase the variety of roles on offer to attract the next generation of talent.”

Construction sector output shows rise – ONS

construction worker stock

Latest Office for National Statistics data on output in the construction industry have shown a return to growth in output for the industry, in particular from housebuilding.

According to the latest figures, December saw construction output rise by 1.8 per cent compared with the previous month, largely due to an increase in new work.

Private commercial work was one of the main drivers behind construction growth, expanding by 5.2 per cent in December.

Compared with December 2015, construction output increased by 0.6 per cent, the main contribution to this growth came from new housing work.

Brian McQuade

Brian McQuade

Brian McQuade, managing director for Kier Construction Scotland & NE, said: “It’s encouraging to see a rise in output activity in the sector.  Certainly Kier Construction is experiencing steady and sustainable growth as we deliver major build projects across education, healthcare, commercial and retail sectors.  We’ve secured a solid pipeline of activity for the 2017 financial year.

“Although access to skilled labour and rising costs remain industry-wide concerns, there are still opportunities across Scotland, including an extra £800m of capital spending on infrastructure projects that will help Kier and the industry develop tomorrow’s diverse supply chain.  I’m optimistic about the year ahead and we have a number of exciting new projects on the horizon that will ensure our continued steady growth in Scotland through 2017 and beyond.”

Allan Callaghan, managing director of housebuilder Cruden Homes West, said: “The confidence felt within the industry is beginning to match up with market activity and it’s great to see housebuilding emerge as a catalyst for sustainable growth.  At Cruden we’ve had a strong start to the year across our private and public housing developments as modern, affordable homes remains in high demand.Allan Callaghan

“The challenge ahead for the Industry to maintain a sustainable continued growth is the persistent problem of skill shortages, well-articulated in the Farmer Review recently. This is again in the spotlight with the news that 12,000 workers are needed in Scotland over the next few years.

“Apprenticeship and training opportunities will go some way to address this but it’s a big gap to fill.  The industry as a whole needs to get the message out there that the construction sector offers a wealth of varied and rewarding careers.  The industry has proved to be very resilient and the future is looking bright – we just need more young people to realise that.”

Housing up but UK infrastructure work slows

construction worker stockConstruction output in Great Britain fell by 0.2 per cent in November 2016 compared with October 2016, largely due to a contraction in non-housing repair and maintenance, official statistics have shown.

In the latest Office for National Statistics (ONS) construction output report, the three months September to November 2017 show a rise of 1.6 per cent, year on year, with all new work up 4.3 per cent but repair & maintenance down 3.2 per cent.

Over the quarter, private housing was up 12.6 per cent but infrastructure was down 6.1 per cent.

Despite the overall fall in all work during November 2016, new housing continued to grow at an increasing overall rate of 1.2 per cent in comparison with October 2016, representing the biggest increment since February 2016. This has resulted in housing output reaching an all-time high of £2,639 million.

Private sector keeps Scottish construction buoyant after Brexit vote

Kier construction stockOutput from the Scottish construction sector seems to have remained buoyant during the three months immediately following the UK referendum vote to leave the European Union, new official figures suggest.

New figures published today by the Office for National Statistics (ONS) found that output in the Scottish construction sector during the third quarter of 2016 was £3.7 billion, down marginally on the same period in 2015, when total industry output was worth £3.9bn.

However, output from the private housing and private commercial sectors and from repair and maintenance were all up compared to the third quarter of 2015, helping to offset a decline in infrastructure output, down from more than £1bn in Q3 2015 to £722 million during the three months to September this year.

Commenting on the new figures, Scottish Building Federation managing director, Vaughan Hart, said: “These new figures suggest that the Brexit vote has had no immediate effect on the performance of the Scottish construction sector. It’s encouraging to see output from the private sector on the rise compared to the same period last year.

“We anticipated a slowdown in infrastructure activity as major projects such as the Queensferry Crossing draw to a close. More concerning is an ongoing slump in private industrial output with the removal of empty property rates relief having a negative impact on that sector of the industry. Future performance will depend on the wider picture for Scotland’s economy.

“With the Finance Secretary due to present his budget for 2017-18 next week, we will be looking for signs of a further boost to capital spending as a consequence of the commitments made by the Chancellor in his Autumn Statement. That should help to keep the construction sector in reasonable health as we look ahead to 2017.”

In the UK as a whole, construction output was estimated to have decreased in October 2016 by 0.6 per cent compared with September 2016. All new work decreased by 0.9 per cent, with the largest downward contribution coming from infrastructure, while all repair and maintenance showed no growth.

Compared with October 2015, construction output increased by 0.7 per cent. All new work increased by 2.9 per cent with repair and maintenance falling by 3.2 per cent. Within all new work total new housing was the biggest upwards contribution with an increase of 12.6 per cent.

Kier Construction Scotland’s business development manager, Gordon Reid, said: “This month’s ONS stats sees a further drop in output compared to the previous month and there is no doubt that output figures for the construction industry as a whole have been fluctuating throughout the year, but at Kier Construction Scotland, we can look back on 2016 as a good year. Despite political and market uncertainty, we have successfully grown the business, our head count and our order book and secured a strong pipeline of work for next year.

“As well as delivering major build projects across our core sectors of education, healthcare, commercial and retail, 2016 has seen us develop our expertise of working on prestigious heritage projects. Our delivery at the Glasgow School of Art, Edinburgh College of Art and Aberdeen Music Hall, has brought a diverse range of skills to the restoration and refurbishment of these historic buildings.

“Looking ahead to next year, there are plenty of opportunities for the construction sector and the government’s commitment of an additional £800m capital spending for infrastructure projects in Scotland over the next five years delivers what could be viewed as an early Christmas present to this important industry.”

Allan Callaghan, managing director of Cruden Buildings and Renewals, added: “In the midst of what’s been an uncertain year for the construction sector, Cruden has focused on growing organically and delivered a strong set of financial results, totalling 18 years of continuous profit.

“A priority for the industry for the year ahead must be to address the ticking time bomb of skills shortages that prevails right across the sector. Every contractor has a responsibility to help tackle this issue and at Cruden, we are playing our part with our successful modern apprenticeship programme. We have around 50 young apprentices at any one time and this month alone, fifteen young people have just completed their training and we expect to retain the vast majority of them.

“As well as a securing our own pipeline of talent, we have also secured a pipeline of activity for the year ahead. I’m also encouraged by the determination of the Scottish Government to deliver on their pledge to see 50,000 affordable homes being built across Scotland by 2021. So as 2017 approaches, I’m optimistic about the health of the construction sector for the year ahead.”