With the General Election over and done with focus turns once again to Brexit. Some experts believe that as the UK leaves the EU some of the large construction projects in the UK will be undermined by uncertainty around foreign investment, as well as the cost and availability of labour and materials. Meanwhile some of the UK’s biggest construction companies have teamed up with the government to bid for overseas contracts under a single ‘Team UK’ banner.
Political uncertainty continues to influence construction markets. The ONS have released their Construction Output in Great Britain: May 2017 figures, showing that construction output fell 1.2% on a 3 month on basis, representing the largest 3 month on 3 month fall in output since September 2012. The Markit/CIPS UK Construction PMI June 2017 report also shows business activity growth slowing, with indications that construction companies are the least optimistic about near-term growth prospects since December 2016. The Index registered 54.8 in June, down from the 17 month high seen in May 2017 of 56.0. However the June index is still registered above the 50.0 no-change mark for the 10th month running.
The latest CPA State of Trade Survey for Q2 2017, revealed that UK construction product manufacturers experienced growth in sales and activity for the 17th consecutive quarter, however higher input costs and rising uncertainty has dampened manufacturers’ views for the near future.
CBI’s latest Industrial Trends Survey, shows that manufacturing firms reported that their total and export order books had strengthened to the highest levels since August 1988. This was underpinned by an improvement in 13 of the 17 sub-sectors surveyed. And according to BEIS, the construction material index for all new work rose by 5.1% in the year to May but fell 0.1% on a monthly basis. Construction material prices for new housing, other new work and repair and maintenance rose by 5.6%, 4.6% and 6.3%, respectively in the year to May.
Feedback from RIBA members for their Future Trends Survey May 2017, shows architects workloads remain stable, with some growth in small residential yet there are indications of a slowing of larger projects in the commercial sector. A report from Barbour ABI and the Construction Products Association on The Regional Construction Hotspots in Great Britain 2017 shows contract awards on major regeneration and infrastructure projects have seen ‘hotspot’ pockets of construction emerge across Great Britain, as investment in housebuilding, infrastructure and commercial shifts away from London and the South East.
Latest figures from NHBC show a total of 14,680 new homes were registered in the UK during May. Of these, 10,231 were registered in the private sector, with 4,449 in the affordable sector, representing an overall increase of 16% on last May’s total of 12,649. The DCLG’s Housing Market Statistical Realise May 2017, shows that over the period since the launch of the Help to Buy: Equity Loan scheme, 120,864 properties were bought with an equity loan. And that the total value of these loans was £5.86bn, with the value of properties sold under the scheme totalling £28.53bn.
The Halifax House Price Index reports that June 2017 house prices decreased 1.0% compared to May, with annual house price easing to 2.6%. The Nationwide House Price Index reports that in June 2017 house prices were 1.1% higher than May, reversing the previous three months’ falls. And annual house price growth rose to 3.1%, returning to the 3-6% range that had been prevailing since early 2015.