RedRock Construction Industry Outlook – January 2019

Looking forward to the year ahead.

How will the industry shape-up as we move into 2019?

Following the Christmas break, January can sometimes be a shock to the system! This is often a quiet time of the year, when we like to think about the year ahead and get to work on our New Year’s Resolutions.

So how are things looking for the construction industry as we embark on 2019?

RedRock Construction Industry Outlook – January 2019

If you remember from our end of year blog, 2018 was quite a mixed year for UK construction, with some major ups and downs. As with many aspects of commercial life in the UK, the uncertainty surrounding the future direction of Brexit was casting its shadow over confidence in the industry, and the ongoing political deadlock means we are not much further forward.

That said, there are some reasons to be a little cheered by the January IHS Markit/CIPS UK Construction Purchasing Managers’ Index and output figures. The rundown to the end of the year, and the Christmas period causes a slow-down in a number of industries, so a reduction in output is never a surprise.

This month’s survey showed a fall to 52.8 in December which was slightly below the forecasted 52.9. A figure below forecast can be an indication of weakening sentiment in the industry but it is important to remember that anything above 50.0 indicates expansion, so the industry is continuing to see growth.

Looking at the detail in the commentary, the drop was in housing and ‘other commercial activity’. Although the overall output figure had dropped, there was encouraging news with stronger performance for civil engineering at the end of 2018. There was also an increase in both transport and energy projects which bucked last year’s trend for optimism about infrastructure work to be subdued by the spectre of Brexit.

RedRock Construction Industry Outlook

Interestingly the report also indicated that business optimism amongst respondents was at its highest level since April last year. According to building.co.uk there are a number of major infrastructure projects on the horizon which may have contributed to this, including HS2 and Crossrail and the country’s major airports Heathrow, Gatwick and Stansted all looking at expansion plans. The important phrase here is ‘on the horizon’. It is vitally important for the industry that these projects go ahead as planned and with minimal delay.

The UK Government Infrastructure Pipeline

There was further good news in the 2018 National Infrastructure and Construction Pipeline which was published by the government in November and which outlines £600bn which has been allotted to fund new infrastructure projects in the UK over the next 10 years.

The plan is that these projects will be undertaken with a new modern and efficient approach to construction which better reflects practices in the manufacturing industry, and will involve the construction of roads hospitals and schools.

RedRock Construction Industry Outlook – January

Our view

Despite the up and down nature of 2018, we are looking forward to a positive and busy 2019 and are continuing to see demand for high quality construction professionals for a range of building and infrastructure projects.

If you are looking for high quality personnel or for your next work opportunity, get in touch with us or browse our job opportunities today.