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.”

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