Worrying news for the construction industry as output falls

Construction output in the UK unexpectedly dipped in July, reversing a bounce seen in June, after the biggest annual fall in house-building in more than two years.

ONS Construction output fell by 1.0 percent on the month, which was higher year on year - with 2014 output for constructing falling 0.7 percent.

A major driver of the decline was a year-on-year fall in the amount of new housing being built, which dropped by 2.5 percent, the first decline since March 2013.

Construction of public housing fell by 15.6 percent, while the 0.8 percent growth in private construction was the slowest since March 2013 as well.

Construction fell sharply after the financial crisis and was slow to recover, but gained pace last year before easing in early 2015.

Michael Thirkettle, chief executive of construction and property consultancy McBains Cooper, said: "Today’s figures show a fall in output, which is worrying news for the construction industry.
 
“There is a chronic housing shortage and although we welcome government plans to build 200,000 new homes by 2020, there is no chance of that number being built unless desperate skills shortages in the industry are addressed.
 
“Restrictive immigration rules are scuppering housebuilding targets, as companies cannot recruit enough skilled foreign workers, in particular the likes of brickworkers and electricians.  
 
"Around 300,000 people left the construction industry between 2008 and 2010, and because training and apprenticeships take time, the government should allow skilled construction workers to be listed as an occupation with official shortages.
 
“This would allow more recruitment from outside the EU, which is impossible under current stringent immigration rules, and help kick-start the housebuilding programme."

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