Quarterly output shows a more positive picture
Latest ONS construction output analysis is optimistic
The picture this month
In our regular industry outlook blogs, we usually look at construction statistics on a monthly basis. Analysis of outputs month by month does provide a snapshot of activity across the industry but as we ourselves have seen this year, the picture can go up and down from month to month.
So when we can, it makes sense to look at information over a longer period of time to develop a more consistent picture. You may remember that in previous blogs we have looked at construction industry analyses which are issued by the Office for National Statistics and their most recently issued figures are an assessment of the third quarter of 2018. The ONS itself indicates in its data commentary that monthly figures have the potential to be ‘volatile’ whereas the quarterly measures provide a more ‘comprehensive’ view of ‘underlying trends’.
A welcome increase in construction output
We know that weather had an impact on quite a weak start to the year so the latest update and analysis from the ONS has shown a welcome indication of recovery with an increase in construction output during the third quarter of 2.1%.
The increase was generated in two main areas – new work across all sectors notably increased by 2.8% and repair and maintenance work increased by 1.%.
In terms of financial measures the value of the increase was £872 million in the third quarter when compared to the second quarter of 2018. The main growth was once again new work in the private housing sector at £507 million. Also worthy of note was non-housing repair and maintenance (an increase of £230 million) and also infrastructure construction (which increased by £191 million). The level of all work reached £13995 million which was the highest since the monthly records were first started in January 2010.
Some construction sectors did see falls in output. These were private commercial new work (£162 million), private housing repair and maintenance (a £124 million decrease) and private industrial new work (a £60 million decrease)
This is positive news but what about the outlook for construction jobs?
In another recent survey the Recruitment and Employment Confederation (REC) and KPMG index for construction staff dropped from 56.9 in September to 55.5 in October. Anything above 50 indicates growth so this figure remains healthy, but a drop shows that whilst there is a continuing growth in vacancies throughout the sector, it is happening at a slower rate.
Industry watchers have commented that despite the positive news on construction output, there is still some uncertainty in the industry, particularly because of Brexit. Inevitably, uncertainty leads to hesitation over some new projects and new hires. Until there is a very clear conclusion from the UK and EU governments, this will continue to hang over the industry.
At RedRock we continue to see healthy demand for skilled and qualified construction workers and we are pleased to note the positive ONS figures for the third quarter of this year.
If you are looking for a new role, or are hoping to hire in the near future – get in touch with us today and we will be delighted to help.