A decline in infrastructure projects led to an unexpected fall in UK construction output in August with the sector suffering from a “Brexit hangover”, according to Michael Thirkettle, chief executive of construction and property consultancy McBains Cooper.
The latest figures from the Office for National Statistics (ONS) show output slipped 1.5 per cent in the eighth month of the year, following a revised increase of 0.5 per cent in July.
All new work, and repair and maintenance reported decreases, falling by 1.4 per cent and 1.5 per cent respectively, with the largest downwards contribution coming from infrastructure, which was 9.3 per cent down compared to August 2015 – marking the sixth consecutive month of year-on-year decreases.
ONS also noted that housebuilding fell 1.3% compared to July, with public and private housing declining by 2.1 per cent and 1.2 per cent, respectively.
Overall output in the three months to August decreased by 1.3 per cent when compared to June, July and August 2015.
However, year-on-year, construction output increased by 0.2 per cent compared with August 2015. All new work increased by 1.1 per cent when compared to a year ago but repair and maintenance decreased by 1.3 per cent.
Thirkettle says that while these figures may reflect a “Brexit hangover” given the short-term uncertainty around the result, he would “caution against too much being read into the result of the EU referendum in isolation.”
The real concern, he says “is what a ‘hard Brexit’ will mean for its labour supply.”
“Because of skills shortages in the UK, skilled EU trades are a vital source that will be cut off once we leave the EU.
“Demonising skilled migrant workers and imposing regressive immigration policies will demolish any hopes of meeting housebuilding targets and solving the housing crisis. The Government should send a signal that migrants will be welcome in the industry, and add skilled construction workers to its Shortage Occupations List.”
Rob Domeney, head of the Manchester office of environmental and engineering consultants RSK Group, added: “It’s evident that the ‘Brexit effect’ is still having a degree of impact as some projects and investments are likely to still be on hold because of the uncertainty surrounding Brexit and the eventual shape that this will take.