Civil engineering contractors are calling on the Government to commit now to long term infrastructure investment in order to prevent economic decline across the UK following the publication today of the latest statistics for UK construction output.
Figures published today by the Office for National Statistics showed that output in the construction industry was estimated to have decreased by 0.7% compared with Quarter 1 (Jan to Mar) 2016. Compared with the same period a year ago, there was a fall of 10.1% in infrastructure: the largest fall since Quarter 2 in 2012.
The reporting period covers the second quarter of 2016 plus the calendar month of June 2016, and therefore includes data for a short period after the EU referendum. The ONS said:
”There is very little anecdotal evidence at present to suggest that the referendum has had an impact on output.”
In Quarter 2 (Apr to June) 2016, output in the construction industry was estimated to have decreased by 0.7% compared with Quarter 1 (Jan to Mar) 2016. Downward pressure on the quarter came from all new work, which decreased by 0.8%, and repair and maintenance (R and M), which decreased by 0.5%. Between Quarter 2 2016 and Quarter 2 2015, output was estimated to have decreased by 1.4%. In June 2016, construction output decreased by 0.9% compared with May 2016.
For all new work, compared with the previous quarter, total new housing and infrastructure decreased by 1.1% and 3.7% respectively, the latter being the third consecutive quarterly fall. Compared with the same period a year ago, there was a fall of 10.1% in infrastructure: the largest fall since Quarter 2 in 2012.
Commenting, CECA Head of External Affairs Marie-Claude Hemming said:
“These results show that the construction sector is slowing down as a result of uncertainty in the run up and aftermath of the European referendum and the change in Government.”
“It is now imperative, in order to prevent recession that there is a fiscal stimulus from Government towards infrastructure investment which focuses on the delivery of projects within the existing pipeline and building the world-class infrastructure of the future.
“Our research has shown that for each £1 billion increase in infrastructure investment, UK-wide GDP increases by a total of £1.299 billion, yet figures from our first poll following the referendum show that the construction market is slowing just as the country needs it to speed up.
“Government must act quickly to avoid a slowdown in growth, which will be bad news for our sector and for the economy as a whole.”
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