Richard Lyle, director in KPMG’s infrastructure practice, comments on the latest Office for National Statistics construction data, which shows that UK construction activity fell 13.1% in September from a year ago:
“More grim news for the construction industry as activity falls again in September to 13.1%.
Disappointingly, the picture for the construction sector in the UK this year has been essentially gloomy. It reflects what we are seeing in the market. The construction supply chain is having a difficult time in a very uncertain and unstable marketplace. Business confidence is fragile and this reflects the state of the broader economy. As a result, the largest slump in output has come from the private commercial sector.
“Unfortunately, this trend is expected to continue into next year and we are likely to see it persisting for the next 6-12 months.
“However, not all the data is dire – it was good to see new infrastructure output up by 9.9%, showing the largest quarter-on-quarter increase in growth. This could be a reflection of infrastructure projects benefiting from government incentives.
“Interestingly, growth was also highlighted by Markit/CIPS this month which showed construction output grow marginally from September to October. Hopefully, new orders will start to filter through and the forthcoming Autumn Statement will address some crucial issues around policy and delivery for the wider infrastructure industry through a revised National Infrastructure Plan, and a clear vision and strategy on finance and investment through the long-awaited outcome of the PFI review. It’s vital that we get business confidence back so next year the construction industry can stand on its own two feet and start moving towards growth.”
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