Economic digest

Clay Technology magazine
15 Feb 2018

Using data from the UK Office for National Statistics and the Markit/CPS Construction PMI, we present an overview of UK construction related economic information.

While the UK’s inflation rate has fallen for the first time since June 2017, Carillion’s liquidation, which was announced in January 2018, will have a significant impact on employees and the company’s supply chain, which further comprises a large number of UK-based sub-contractors.

The latest UK Office for National Statistics figures for construction output show a decrease of 2% in the three-month on three-month series in November 2017. This is the sixth consecutive period of decline and represents the biggest contraction since August 2012.

However, construction output grew month-on-month, with the figures showing a 0.4% increase in November 2017. The increase in output for November is a result of increases in both repair and maintenance, and all new work.

In other sectors, all new work grew marginally, by 0.4%, with levels remaining flat across all types of work. Only private housing provided a positive contribution to growth, the fifth consecutive growth period in this sector, increasing by £100m.

Tim Moore, Associate Director at IHS Markit and author of the IHS Markit/CIPS Construction PMI, said of the latest Markit survey, ‘Construction firms indicated that longer-term business confidence is still relatively subdued, largely reflecting concerns about the domestic economic outlook. The balance of UK construction companies expecting growth in the year ahead remains among the weakest recorded by the survey since mid-2013.’