Is there a Reduction in Construction Activity?
Housebuilding
Official data has indicated that housebuilding activity in the UK is slowing down. It is believed this is due to a combination of the cost-of-living crisis, the war in Ukraine, rising inflation and also the government’s reduced support of the expansion of the industry in order to deliver the 300,000 homes per year they promised in the last election.
Rico Wojtulewicz, Head of Housing and Planning Policy at the National Federation of Builders, believes the planning system is the key culprit for this drop. He thinks there is already a drop off in supply – and that gridlock in local authority planning departments in the aftermath of covid is largely to blame. “It’s a combination of things – there’s materials prices, labour availability. But the main frustration is from the working from home in council planning departments – there’s just a huge delay in getting sign off of any project through to sites.
S&P Global say, ‘house building was the weakest-performing area of construction activity for the fourth month running in June. Moreover, the latest index reading of 49.3 signalled an overall downturn in residential work for the first time since May 2020,’
Total new orders were at the softest since October 2021.
Sub-sectors
In terms of sub-sectors, civil engineering was the ‘most resilient’, S&P Global said, with commercial activity also battling in June.
The survey is compiled from responses to questionnaires sent to a panel of around 150 construction companies. The data was collected from June 13 to 29.
Tim Moore, economics director at S&P Global Market Intelligence, said: ‘The gloomy UK business outlook and worsening consumer demand due to the cost-of-living crisis combined to put the brakes on construction growth in June. Commercial construction saw a considerable loss of momentum as clients exercised greater caution on new spending, while long-term infrastructure projects ensured a relatively resilient trend for civil engineering activity.’
He also said construction firms are in line for a ‘difficult’ second half, with new orders and business activity forecast to fall.
A recent study by INSEE, showed 48% of business managers have been facing difficulties due to workforce shortage, and 37% have reported supply difficulties.
Despite the drop, for Jigsaw Property Maintenance , business has been booming! Our team of seasoned builders and installers have been working consistently to turn your visions into tangible structures.
If you are looking to make home improvements of any size, get in touch hello@jcs-ltd.co.uk
Sources:
