New figures have revealed an upturn in the UK's construction output following a relatively weak start to 2018.

The latest ONS figures show output rose 3.3% in the three months to July, driven by growth in both repair and maintenance, and all new work, which increased by 5.3% and 2.3% respectively.

Concerning the month-on-month series, output grew by 0.5% in July thanks to a 4% rise in new private housing work.

However, total construction new orders declined by 6.2% during the second quarter, following for a third consecutive period and reaching its lowest level since Q1 2013. This fall was driven predominantly by a 17.6% drop in new housing orders, which fell to a similar level seen in Q4 2017, following strong growth in Q1 2018.

Michael Thirkettle, Chief Executive of McBains, said the figures "represent another much-needed boost to confidence in the sector".

"Underlying growth remains fragile however, and the real test will be if this can be sustained in the months to come, given the uncertainty over issues like Brexit that have impacted on UK companies' commitment to new projects over the last two years," he said.


"In particular, separate figures published by the ONS recently show the lowest level of net migration from the EU since 2012, which has again raised concerns as to how construction will cope with a reduction of a skilled labour supply from the EU post-Brexit. If sustained growth is to be realised, then the industry will need the workforce with the right skills, but this is far from clear at present."

Mark Robinson, Scape Group Chief Executive, said the industry experienced a "welcome boost" in the three months to July as firms continued to shake off their disappointing start to the year.

"Whilst the spring bounce back may have occurred late in 2018, it is promising to see that activity on the ground ramped up as soon as the hot weather hit," he said.

"Output increased by a massive £1.34 billion, which included a large jump in new work – particularly encouraging given the current macro environment.

"However, disparities between sector outputs are clear. Private housing continued to carry the industry in the three months to July, whilst public housing slipped into decline. In order to truly address housing need in the country, we need a collaborative effort between the public and private sectors. It is vital that the Government equips local authorities with the funding powers to deliver new homes and that the industry focuses on modern methods of construction to deliver homes efficiently and effectively."

Concluding, Mr Robinson said it is "absolutely essential" the Government does all it can to keep the current optimism going with the UK's EU exit date nearing in six months time.

"Greater clarity is critical to prevent current confidence waning, and quick and bold decisions now on both long and short-term projects would go some way to continuing this momentum through the remainder of the year," he said.

(LM/CM)