The ONS have released their Construction Output in Great Britain: August 2017 figures, showing that construction output contracted by 0.8% on a 3 month on 3 month basis in August, but remains at relatively high levels. This decline was mainly due to decreases in both repair and maintenance and all new work falling 0.6% and 0.9% respectively.
The IHS Markit/CIPS UK Construction PMI October 2017 report shows September to have been a difficult month for construction, as a sustained drop in new work led to the first reduction in overall business activity since August 2016. The Index registered 48.1 in September down from 51.1 in August and below the 50.0 neutral mark for the first time in 13 months, the fastest decline in overall construction output since July 2016.
In contrast the September Economic & Construction Market Review from Barbour ABI shows that August provided a welcoming boost for construction, as the value of new contracts awarded reached £5.8bn based on a 3-month rolling average. This is a 7% increase from July 2017 and the highest recorded figure since March 2017.
Glenigan report that mixed messages in the industrial sector could benefit construction. The industrial sector was hit hard by uncertainty after the Brexit vote as underlying project starts fell 26%. However it has been one of the first areas to benefit from an upturn in activity which is expected to continue. This is due to a rise in project starts since the beginning of 2017, suggesting that investors are now pressing on with some of their delayed projects as confidence improves.
The construction material price index for all work increased 5.0% in the year to August 2017 and rose 0.4% on a monthly basis. Construction materials prices for new housing, other work and repair and maintenance rose 5.2%, 5.1% and 5.7%, respectively, in the year to August 2017.
No doubt, this has contributed to Carillion’s problems, with financial results for the six months ended 30 June 2017 showing a 40% fall in underlying pre-tax profit and total revenue remaining flat at £2.5bn. This has led to a lowering of expectations for their full year results, and a fall in expected revenue.
According to HMRC, in August 2017 the number of property transactions in the UK totalled 103,490. This shows a 0.5% decrease from July 2017, but was 6.6% higher compared to a year earlier.
ONS figures for July 2017 show that UK house prices increased 1.1% compared to June 2017. And annual house prices increased by 5.1%, driven by rises in the East of England and East Midlands. The lowest annual growth was reported in London, followed by the South East.
The Halifax House Price Index reports that in September 2017 house prices increased 0.8% compared to August. And annual house prices increased for the 2nd consecutive month to 4.0% from 2.6% in August 2017. In contrast the Nationwide House Price Index reports that in September 2017 house prices were 0.2% higher than August. And annual house price growth is broadly stable at 2.0%, however London is the weakest performing region for the first time since 2005.
Inside Housing asked how can the sector deliver more homes faster? In their recent twitter panel discussion on housing development for housing day. A storify of the event can be found here.
