Private housing the only sector seeing growth, after strong September
The government is facing calls to scrap its skills-based immigration system as new data showed construction output dipped in October.
Construction output in the UK fell 0.2%, compared with a 1.7% rise in September, with falls in activity across public housing and infrastructure sectors helping to depress overall construction output, according to new data from the Office for National Statistics.
The ONS said output public new housing fell 8.1%, infrastructure was down 3.7% and total repair and maintenance was off by nearly 1%. The only significant increase was private new housing, up 2.4%.
Sarah McGonagle, external affairs director the Federation of Master Builders, called on the government to scrap its proposed skills-based immigration system post-Brexit, replacing it with one 鈥渢hat allows us to draw on essential migrant workers. Without this, we won鈥檛 be able to keep building at the current rate and construction output will continue to fall.鈥�
The residential sector鈥檚 ability to defy Brexit headwinds was waning, according to Blane Perrotton, managing director of property consultancy and surveyors Naismiths.
Noting that new orders for resi developments shrank by a quarter between the first and third quarters of 2018 and after a generally good summer for the sector Perrotton said the dip was 鈥渟ymptomatic of an industry which has been starved of the oxygen of confidence鈥�.
Meanwhile, companies large and small were feeling the double pinch of rising wage costs and increasing raw material prices, according to the FMB鈥檚 McGonagle, with the depreciation of sterling following the EU referendum seeing key materials becoming more expensive, she said.
鈥淲e are expecting material prices to continue to squeeze the margins of construction firms with recent research from the Federation of Master Builders showing that almost 90% of builders believe that prices will continue to rise in the next six months.鈥�
The ONS also reported UK GDP grew by 0.4% in the three months to October 2018.
On a rolling three-month basis the construction sector grew 1.2%, it added.
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