Housebuilding falls back

The housebuilding sector’s growth slipped back in April, according to Barbour ABI’s latest Economic & Construction Market Review.
Results showed that the total value of all new construction contracts awarded in April fell by 1.8% compared to the month before, with the number of projects also 6.6% lower.

Key findings were:

  • Residential construction had the highest proportion of contracts awarded by value in April, with 33% of the UK total
  • London accounts for 16% of the total value of new contracts awarded. Four of the top 10 most valuable contracts were located in the city
  • Scotland came out on top overall, accounting for 21% of all contracts by value;

    Michael Dall, lead economist at Barbour ABI, said: “With economic output only 0.6% below its pre-crisis peak in Q1 2008, there is no question that the economy is experiencing a growth phase. Construction, too, has continued to grow over recent months, and the recent ONS output figures show the first quarter of this year was at 5.4% higher than the equivalent period in 2013.

    “While the continued recovery is noticeable and welcome, analysing individual sectors within the industry provides a note of caution. Private housing continues to drive resurgence in the construction industry, boosted by government initiatives such as Help to Buy. However, there are concerns that too much of this growth is concentrated within the housing sector, and an upturn in other key sectors – particularly private commercial and infrastructure – is vital for a stronger and more durable recovery.

    “In addition, there have been reports recently of skills shortages affecting the construction industry. Addressing these supply-side constraints is crucial to ensure the long-term health of the industry going forward.”

  • About Fiona Russell-Horne

    Group Managing Editor across the BMJ portfolio.

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