Building crumbles further in April

UK construction outputs decreased significantly in April with the total value of contracts awarded at just £5.5bn, according to figures released today (21 May 2015).

The volume of activity is 9.8 per cent less than in March, but 11 per cent higher than the same period in 2014.

While all sectors dipped throughout the month, commercial and retail caused the greatest drag on overall growth with the total value of construction contracts down by 12.9 per cent from March to £731m for the month.

Public sector contracts across the health and educational industries were limited in April, contributing to the overall drop in outputs. However, these have potential for long term growth as a result of scheduled investment from schemes such as the National Infrastructure Plan.

Private housing has been one of the strongest performing areas within the industry, accounting for over two thirds (67 per cent) of the value of contracts awarded in April, due to big ticket projects such as the £69m Wandsworth Riverside Quarter development in London.

The report by Barbour ABI, which supplies construction data to the Office for National Statistics (ONS), Cabinet Office and Treasury, also noted that construction is currently 7.5 per cent below its pre-recession peak.

Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said:

“The decline observed in April of this year is arguably symptomatic of the perfect storm that pre-election uncertainty, financial year end and typical monthly volatility have created. Despite this apparent cloud over construction, demand within housing coupled with scheduled works across the public sector suggest there are in fact many sunny days on the horizon.

“Improved confidence and accurate forecast spend as a result of the newly formed Government and pending July Budget should help reinvigorate the construction sector for a stronger performance later in the year provided these pending peaks are sufficiently prepared for and harnessed.”

These latest figures are taken from the Barbour ABI Economic & Construction Market Review, a monthly report designed to give valuable insight into UK construction industry performance. It is compiled from Barbour ABI’s records of construction data for every UK planning application, and key indicators, such as the Office for National Statistics’ Construction New Orders data.