ONS construction dip ‘reflects EU uncertainty’

FMBThe Federation of Master Builders (FMB) has pointed towards uncertainty amongst businesses and consumers ahead of the EU referendum as a reason behind the latest fall in output within the construction industry.

Latest construction sector figures from the Office for National Statistics (ONS) revealed a 0.3 per cent fall in output during February compared to the month before

According to the report, both all new work and repair and maintenance reported decreases, falling by 0.2 per cent and 0.5 per cent respectively.

Sarah McMonagle, head of external affairs at the FMB, said the figures, which show that construction output fell for the second month in a row, could well stem from uncertainty around the outcome of the EU referendum.

She added: “Construction is an industry that is particularly sensitive to fluctuations in confidence and the forthcoming referendum seems to be having a negative impact on business owners and consumers alike. Much in the same way as the Scottish independence vote weighed on industry confidence back in September 2014, hesitance over investment will likely prevail until we know the result on 23rd June. This isn’t a precipitous drop, but after the prolonged downturn experienced by our sector following the financial crisis, these results are disappointing. We can only hope that this contraction is a blip rather than a prolonged decrease in construction output.”

Within new work, there were decreases in all work types, except private new housing. Within repair and maintenance (R&M) there were falls in all work types except public housing R&M.

Scottish construction firms Cruden Building & Renewals and Kier Construction, said the figures do not reflect their experience in Scotland.

“While disappointing, these ONS statistics don’t fully illustrate the optimism felt by those on the ground, nor do they reflect the resoluteness of the Scottish construction industry,” said Allan Callaghan, managing director of Cruden Building & Renewals.

“Housebuilding remains a key driver for Scottish economic growth and will continue to do so. At Cruden, our ongoing work across a number of projects, including the launch this month of our new Baron’s Vale development at Glasgow’s east end, will help to support further growth.”

Gordon Reid, business development manager for Kier Construction in Scotland, added: “Kier entered the year on a high with the announcement of a good set of half-year financial results, strongly supported by our ongoing successful framework model.

“This steady growth allows us to facilitate local employment and training opportunities throughout the country on all the projects we undertake. Addressing the skills gap in the industry should be a priority. With new opportunities on the horizon, we must ensure we have a talented, hard-working, technically astute workforce to take advantage of these opportunities when they arise.”

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