Construction output drops for fourth consecutive month

Allan Callaghan
Allan Callaghan

Output in the UK’s construction sector contracted by 0.9% in the month of July, while falling 1.2% on a three month to three month basis, marking a fourth month of consecutive decline.

Data released today by the Office for National Statistics (ONS) has attributed the regression on a 1.4% fall in new work, the most in more than three years.

The three month to three month decline in output was due to decreases in both repair and maintenance, which fell 1.8% and all new work, which fell by 1.0%, it added.

“Both the month-on-month and three month on three month series fell for the fourth consecutive month in July 2017,” the ONS said in a release, while noting that output “remains at relatively high levels.”

Noting the decline, and criticising the Scottish Government’s planning system review, Allan Callaghan, managing director of Cruden Homes, said: “The construction sector as a whole has slowed up in recent months, with the effects of economic and political uncertainty, reduced government spending and the fall-out from delayed Brexit decision making and doubt over the outcome of negotiations affecting client and purchaser’s decision making.

“We’re seeing a continued demand for affordable, quality housing across Scotland and this is resulting, currently, in a good trading market for housebuilders. Social housing projects are still having a lengthy development period and there is no doubt that the current projects which started late are supporting this continued turnover but new projects need to come on stream within a shorter development period.”

He added: “The planning system remains challenging and it’s disappointing that the scope of the Scottish Government’s review of the planning system has moved from major reform to a series of procedural changes. Quite simply, the widely held view in the industry is that the planning system needs to speed up or this will threaten the scope of future development right across the country.”

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