Downgraded outlook for construction industry due to Brexit


Forecasts from the Construction Products Association six months ago for the UK construction industry have been downgraded from a rise of 2.3% to a rise of just 0.3% for the current winter period. Brexit uncertainty has been blamed for the sharp fall.

While private housing and infrastructure are responsible for the small rise and are the main drivers of the industry, due to commitments from the government on housing, uncertainty over Brexit has seen declines in other areas. These include the commercial sector where investment in offices is expected to fall by 20% during 2019.

The report does point out, however, that the harbours sector is expecting a rise of 12% this year and 10% next year due to the Brexit infrastructure required on UK ports. Warehousing will also benefit from Brexit requirements.

Infrastructure projects such as HS2 and Hinkley Point and the confirmed extension of the Help to Buy scheme have allowed for the modest rise in expected output - even at these revised levels.

Economics Director Noble Francis from the Construction Products Association has stated that how construction firms fare will depend on the sector they work in. These forecasts depend on there being an agreement on the Brexit deal or a deal being delayed - however, either of these options is still causing uncertainty.

The recent cancellation of the Moorside nuclear power station and the stalling of another has been highlighted as a major concern regarding the government's inability to move forward on large infrastructure projects. The report suggests that if the government can move forward on these types of projects it is possible for the construction industry to outperform in spite of Brexit.