The ONS have released their Construction output in Great Britain: June 2016 & April to June 2016. Output was estimated to have decreased by 0.9% in June 2016 compared to May 2016. Also output was estimated to have decreased by 10.7% in Q2 2016 compared to Q1 2016 due to downward pressure from decreases in both all new work and repair & maintenance. More recent figures from the latest Barbour ABI Economic & Construction Market Review shows that in August 2016 all contract activity decreased by 5.1% compared to July 2016 and is 13.4% lower that the value recorded for August 2015.
In contrast to this the latest CBI monthly Industrial Trends Survey shows manufacturing output continuing to expand at a healthy pace. Manufacturers are expecting the rate of production to accelerate rapidly, with 11 of the 18 sub-sectors upgrading their expectations for output over the next three months.
The Markit/CIPS UK Construction PMI September data highlights an upturn in business activity across construction for the first time since May 2016. The Index registered 52.3 in September 2016 an increase from 49.2 in August 2016, and above the neutral value of 50.0 for the first time in 4 months. The Construction Product Association’s latest State of Trade Survey also shows continued growth in sales of construction products for Q3 2016. With sales increasing for the 14th consecutive quarter, and in the first survey since the EU referendum, manufacturers have moved from a pessimistic outlook to an optimistic one regarding near-term prospects.
The Government has unveiled plans to invest £5bn to accelerate the construction of new homes. The home building fund will release £1bn of short-term loans for small builders, custom builders and innovative developers to deliver 25,500 homes by 2020, a further £2bn of long-term funding for infrastructure will unlock up to 200,000 homes.
According to NHBC’s latest registration statistics 12,486 new homes were registered to be built in the UK in August 2016, an increase of 20% compared to August 2015. Overall, there were 36,869 new home registrations in the rolling quarter of June 2016 – August 2016, an 8% decrease when compared to the same period in 2015.
The latest Help to Buy scheme quarterly statistics shows that in the first 39 months to June 2016, 91,759 properties were bought with the support of the Help to Buy: equity loan scheme, and the majority of sales were to first-time buyers representing 81% of total sales. These statistics come as The Council of Mortgage Lenders reports a late summer rise for gross mortgage lending as it reaches an estimated £22.5bn in August 2016, which is 7% higher than the lending total of July 2016 and a rise of 15% year on year.
The Nationwide House Price Index reports that in September 2016 house prices increased by 0.3%, with annual house price growth slowing to 5.3% from 5.6% in August 2016, indicating a softening of house price growth throughout September. The Halifax House Price Index reports that in September 2016 house prices increased by 0.1% and in the last 3 months (July – September) were 0.1% lower than the preceding 3 months. They also report that prices were 5.8% higher in the 3 months to September than the same period in 2015.
Plumbers and builders merchant chain Wolseley have announced they will be closing 80 branches and laying off up to 800 staff as part of their UK streamlining strategy. This realignment could take two to three years and will generate annualised savings of up to £30m for the group.