The UK’s construction sector has suffered its first drop in new orders in more than three years, as the uncertainty surrounding the EU referendum and weakness in the global economy have prompted firms to hold back on big projects (1).
The Office for National Statistics said construction output – which accounts for about 6% of the economy – fell 3.6% in March; the biggest decline for more than four years (2).
For the first quarter of 2016, output was down 1.1% on the previous three months, and down 1.9% on the same period in 2015 (2).
A survey of the sector compiled by Markit and the Chartered Institute of Procurement & Supply (CIPS) revealed that the industry’s growth as a whole had also slowed. David Noble, Chief Executive of CIPS, said: “The sector appeared to have taken residence in a waiting room of non-activity, as continuing poor global economic conditions and uncertainty around the EU referendum impacted growth and new orders” (1).
Construction companies also increased their hiring to the fastest rate since the beginning of the year. Markit Economist Mr Moore said that “an optimistic interpretation” of the increase in recruitment was that firms were looking beyond the weak second quarter and assuming that the sector would recover after the referendum (1).
“However, should this fail to materialise later in 2016, then job creation is likely to come under pressure given its elevated trend relative to current demand patterns,” he added (1).
- (1) – Economic uncertainty prompts first drop in building orders in three years – Telegraph Business
- (2) – UK construction sector suffers sharp slowdown – The Guardian