Fall in office and housing activity decreases industrial production

Due to a fall in commercial office new work, an overall decline of 0.2% in the construction industry in the UK was recorded. This increases the December tendency for falling in the building industry. But what is the reason for that, and how will the industry react?

The main source: Fall in office and housing activity dents industry output

What is the reason for the office and home buildings falling apart?

According to research, there are a few reasons for falling down the building industry. The first of them – is the weather. It`s a normal thing when building processes decrease due to bad meteo conditions.

But the next things are more dangerous. The second reason for falling – is the decrease of new works. 0.7% of the total fall was noted. From it, 6,1% and 1,8% were falling in commercial new works and private new works.

Clive Docwra, managing director of property and construction consultancy McBains, said: “The industry will be concerned to see private commercial new work falling so steeply. The worry is that longer-term stagnation in the wider economy risks having a continued impact in terms of investor uncertainty. This may lead to further projects being put on hold.”

How it will influence the industry in the future?

If such a tendency continues, and even becomes worse, it may have a very bad conclusion for the UK economy and building industry. First of all, this will mean a reduction in GDP and fewer jobs. Also, it makes the UK government’s strategy for building 1,5 million new houses difficult, if not impossible, to execute.

Scott Motley, head of program, project, and cost management at AECOM, added: “A negative reading tallies with other industry barometers and confirms the notable slowdown seen since the start of the year.

“With the UK’s much-needed infrastructure upgrades at the heart of the government’s growth strategy. The latest raft of announcements from Whitehall brings reason for optimism for contractors concerned by challenging economic conditions.

“Indeed, the much-trailed Planning & Infrastructure Bill is the most significant shift towards a properly supported, long-term infrastructure strategy in a generation.

“The Bill should ultimately facilitate greater private sector investment. The need for which is likely to come into even sharper. Focus as the Chancellor potentially eyes up more cuts to local authority funding ahead of the Spring Statement.”

Fencyx, as one of the leaders in the UK building industry, hopes that the government will use all available methods to change this tendency. We want to note, that the building industry is crucial for all economies, and its decreasing will have negative and long-range effects.

Read also: Government Neglects Retrofit for Building New Houses