Construction output down sharply in May, says ONS

Howard Chapman discusses the latest construction output figures and how the Brexit vote is affecting housebuilding.

The latest Office for National Statistics reports that construction output in the UK dropped by 2.1% in May, compared with the previous month which saw a 2.8% increase in recorded construction activity.

There were decreases in all work types, except infrastructure. The main contribution to the decrease came from private new housing.

According to ONS, May’s fall, taken together with the strength of April’s figures, continues a longer trend of broadly flat output growth since the start of 2015.

Will Brexit hinder construction output?

Ultimately, the construction data suggeststhat the sector was hit by increased caution among clients as the run-up to the referendum on EU membership magnified UK and global economic uncertainties.

As IHS Markit’s Howard Archer argues: ‘This raises serious concerns as to just how much the construction sector will be hampered by the Brexit vote.’