BoE shows construction output contracting

Author: Ross Sturley CIMCIG

The CIC have circulated the Bank of England’s Agents’ Summary of Business Conditions for Q4 of 2019.

A summary of the construction position is as follows:

• Construction output contracted slightly. Uncertainty led to delays in infrastructure, commercial and residential projects.

• The Agents’ score for construction output fell to its lowest in 6½ years. Commercial developers were cautious and shifted towards smaller, lower-risk projects. Industrial work grew, but there was very little speculative development.

• Contacts remained cautious about prospects next year, though some thought output might be supported by increased government spending.

• Growth in private house building remained positive. But build rates slowed due to a weaker housing market, skills shortages and planning delays.

• There was stronger growth in publicly funded housing projects. Housing associations continued to build and local authorities were increasingly active in property development. Public spending on education had also supported construction growth.

• There was some evidence that growth in residential repair and maintenance had softened further.