Post-Referendum there is uncertainty around the data in the near-term. Because of this the CPA have decided not to publish their standard point estimate forecasts, normally reported in their Summer Construction Industry Forecasts. Instead they have developed Construction Industry Scenarios – Summer 2016. This presents higher and lower bounds to reflect the extent of the uncertainty. Headline figures show total construction output is forecast to increase 0.4% in 2016, fall 0.6% in 2017 and rise 1.2% in 2018. The infrastructure sector is the only sector to see output increase across all years. The CPA have published a series of blogs explaining the Industry Scenarios.
Competitive Advantage in conjunction with the Chartered Institute of Marketing Construction Industry Group (CIMCIG) has set up a quarterly survey to measure the impact of Brexit on Sales & Marketing in the construction sector. Please follow the link to give us your feedback and register for a free report of the findings.
The Savills Commercial Development Activity report for August 2016 showed a 89-month low in July of -18%. Expected falls in activity in office and retail & leisure, were blamed on the impact of Brexit on client confidence. This is expressed as a negative balance figure for leading developers and contractors of -18%, with public sector sentiment notably falling much more sharply than private, which fell by -27.9% compared to -13.1%. Overall UK commercial developers remained pessimistic towards the prospects for activity in the coming three months.
A survey by the Architects Journal shows how Brexit is affecting workloads. The survey reveals that more than half of architects have had projects put on hold following the result of the referendum. And a survey by Building magazine reports 49% of industry professionals have lost work post-Brexit.
In contrast construction buyers saw workloads recover in August from lows seen in July, as the Markit/CIPS Construction PMI index recovered to 49.2 in August from 45.9 in July. Alongside this a number of the bigger players in the sector report robust results with a relatively positive outlook, suggesting there may have been less negative impact from the referendum result than was originally feared. In the housing sector new research from the Federation of Master Builders has revealed 69% of SME Housebuilders are yet to see any changes to their businesses resulting from the referendum. Also the August 2016 RICS Residential Market Survey results suggest confidence continues to recover, prices and sales volumes are now expected to rise going forward. Meanwhile a RICS survey has shown a fall in employment and a shortage of skilled workers following Brexit.
Construction Manager is running a series of articles to help make sense of the post-referendum landscape. They have asked a cross section of their readers what impact is uncertainty having on you? Kuldip Dhanoya discusses Brexit and public procurement, explaining that the main procurement regulations within the UK will remain the same and will continue to regulate public purchasing unless changed by parliament. And Ian Exall writes for RIBA Insight how Brexit uncertainty should trigger greater focus among construction industry marketers on the fourth ‘P’ (Place).