By Ian McConnell
UK construction output continued to tumble in October and the sector shed staff amid political and economic uncertainty fuelled by Brexit, with residential building dropping at its fastest pace since June 2016, a survey shows.
The Chartered Institute of Procurement and Supply’s activity index for the UK construction sector edged up from 43.3 in September to 44.2 in October on a seasonally adjusted basis, but remained well below the level of 50 deemed to separate expansion from contraction. Although the slight uptick in the index signalled a marginal easing of the rate of decline of construction activity, CIPS highlighted the fact that the fall was nevertheless close to the steepest monthly drops recorded by the survey over the last 10 years. The 10-year low of 43.1 was in June.
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CIPS said construction companies had noted client demand remained subdued in response to domestic political uncertainty and the economic backdrop. It added that, in some cases, survey respondents had observed that unusually wet weather in October had acted as an “additional headwind” to construction output.
Activity in civil engineering, the worst-performing of the three construction sub-sectors covered by CIPS’s survey, fell last month at the fastest pace since October 2009. Commercial property construction activity dropped for a tenth straight month in October, although at the slowest pace since May.
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New work in UK construction fell for a sixth straight month in October. And construction employment numbers have fallen in every month since April. Business optimism in the sector was last month at among the weakest since 2012.
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CIPS director Duncan Brock said: “To say these figures are disappointing is a big understatement. Given the next political hurdle is December’s General Election, all eyes will be on the new administration and clear direction, because at the moment there is little insight into what could possibly pull the sector out of its ditch.”
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