RedRock Construction Industry Outlook – January 2020

The UK Construction Industry looks forward to a new decade

Can the sector leave the ups and downs of 2019 behind?

In our December blog we looked back over the previous year and the highs and lows that were experienced by the industry throughout 2019.

Our regular readers will remember that it was something of a mixed year with industry sentiment wavering during 12 months of political uncertainty.

RedRock Construction Industry Outlook January
Time for New Year’s Resolutions

In January we customarily think about our New Year’s resolutions and we are even more likely to consider the future as we embark on a new decade. Inevitably we need to look back at the end of last year to set the scene for 2020.

The latest construction output update

Updated on a monthly basis, the most recently published construction industry output figures from IHS Markit/CIPS revealed that construction output fell for the 8th consecutive month last month.

RedRock Construction Industry Outlook January. Our latest views
Another fall in construction output

Respondents cited the all too familiar ongoing political uncertainty as being a major contributor, along with subdued client demand ahead of the general election.

The index score was 44.4 which was lower than last month’s 45.3. The survey also reflected the longest ongoing period of falling activity for a decade.

Civil Engineering fares the worst

The drop was across all sectors but once again, Civil Engineering was the area that saw the worst performance.

RedRock Construction Industry Outlook January. All of the most recent developments
The Civil Engineering sector was the worst affected in the most recent figures

Our regular readers will know that 2019 saw many major infrastructure projects put on hold because of the uncertain political environment.

This month’s feedback from respondents indicated that contracts for these sorts of projects were not being awarded. This had resulted in limbo for many projects and major infrastructure developments.

RedRock Construction Industry Outlook January. Feedback from the experts
Major infrastructure projects have been in limbo

It is no surprise that activity dipped ahead of the general election. The potential for a change of government and subsequent altered national priorities was inevitably going to cause a pause for anyone considering a major new construction project.

However, this time around the situation was further exacerbated by the hoped-for resolution of the Brexit impasse, which was very much dependent on which party won the election.

In addition to the woes for the civil engineering sector, commercial work also saw a dip which was directly linked to a general unwillingness to move ahead before the election results were known.

RedRock Construction Industry Outlook January. Our view on commercial construction
The commercial construction sector is also less than buoyant

Although it was the most robust sector throughout 2019, there was also a notable drop in house building activity. To add insult to injury the industry also experienced increased costs in fuel and energy prices at the end of the year.

How about the future?

Despite this, anecdotal feedback did indicate that there was a feeling of more optimism for 2020 – with an outcome to the Brexit situation being paramount and a clearer national picture with a majority government in place.

Industry respondents felt better than they did in the summer when confidence was at an all time low.

RedRock Construction Industry Outlook January. A more positive outlook for the new year?
More optimism for the sector in 2020?

Our view

Despite the political uncertainty of last year, projects are going ahead and there continues to be a demand for experienced and quality construction professionals for a range of construction requirements throughout London and the South East.

RedRock Construction Industry Outlook January. Get in touch for more info
Quality support for our clients

We are also delighted to continue to support our clients with a range of civil engineering, commercial and house building construction requirements so if you need experienced professionals for your project – we will be delighted to help.

Register your details or contact us today for more information.