The construction sector including HS2 has contracted again, falling 1.7 per cent between September and October, according to official data.
Output in the construction sector had fallen 1.4 per cent in the 3 months to October compared with the quarter before, the sixth three-month period in which it has fallen.
The drop was driven by 3% fall in repair and maintenance and a 0.6% fall in all new work.
HS2 Rail Project
But there was one ray of light in the 3rd quarter of the year, new orders grew by a record 37.4 per cent, although the ONS said that was largely thanks to several high-value new contracts relating to the government’s HS2 rail project.
The outlook for the sector is unlikely to brighten – IHS Markit’s closely-watched purchasing managers’ index, published earlier this week, barely crept back into positive territory in November, having shown a contraction in October.
The government boosted house building, was the only driver of growth, Tim Moor, associate director at IHS Markit, admitted.
Sustained declines in civil engineering and commercial activity meant that large areas of the building industry have become stuck in a rut. Reduced tender opportunities and fragile demand are placing a dark cloud over the near-term outlook.
November survey data indicated that UK construction companies are now the least confident about their forthcoming workloads since December 2012. Staff recruitment has also begun to tail off as construction companies head into the winter with heightened concern about demand conditions.
Brexit uncertainty will continue to hit commercial projects, while a planned 4.5 per cent decline in public sector investment next year will additionally dampen the sector
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