Thursday, 15 October 2015

UK Construction Market Update - September

The ONS have released figures for Output in the Construction Industry, August 2015, showing that output was estimated to have decreased by 4.3% compared with July 2015, and 1.3% compared with August 2014.

This is the first fall in output since May 2013. All work types decreased in August 2015 compared to July 2015, with new work decreasing by 3.6% and repair and maintenance decreasing by 5.6%.

Barbour ABI have released their latest Economic and Construction Market Review. According to their data on all contract activity August 2015 saw a decrease in construction activity levels, as new contracts awarded decreased by 0.3% from July 2015, although this is still 22.4% higher than the value recorded in August 2014. Also the number of construction projects in the UK decreased by 6.6% in August 2015 compared with July 2015; however this is still 6.3% higher than August 2014.

The KPMG UK Government Construction Pipeline Analysis shows that the total value of projects in the pipeline has fallen from £127.8bn in December 2014 to £118.7bn in August 2015. Meaning the construction pipeline has lost just over £9bn in value, with most of this decrease coming from a fall in value, of £6.7bn, in transport projects and a fall of £2.8bn in housing projects.

Although all other industry figures point to a slowdown in construction growth, the Construction Product Associations State of Trade Survey Q3 2015 shows construction product manufacturers’ sales increasing for the 10th consecutive quarter, with manufacturers remaining optimistic for prospects over the next 12 months.

The Markit/CIPS UK Construction PMI also registered an increase in September to 59.9 from 57.3 in August, still well above the neutral value of 50.0. This was the fastest increase in output levels since February 2015, overall representing a seven month high for construction output growth.

UK Construction PMI - September: 59.9

The NHBC Foundation have released their new research, Tenure Integration in Housing Developments. Which finds that house prices are not reduced on developments successful in integrating social and private housing, and integrated housing is also found to increase social cohesion. Lloyds Commercial Banking have launched their inaugural survey of the UK housebuilding industry, indicating an overall positive outlook for housebuilding, yet with a number of challenges for the future. This as Minister Brandon Lewis announces the intention to build a million new homes in Britain by 2020, to alleviate the housing crisis and the House Building Federation welcomes the governments offer to independently deliver an extension to the Right to Buy.

The Nationwide House Price Index reports that in September 2015 house prices increased by 0.5%, with annual house price growth increasing to 3.8% in September 2015 up from 3.2% in August 2015. On the other hand Halifax House Price Index reports that in September 2015 house prices fell by 0.9%. And house prices in the last 3 months (July – September) were 2.0% higher than the preceding 3 months.

Galiford Try have released their annual results statement for the year ended 30 June 2015. These results show pre-tax profit of £114m for the year, which is an increase of 20% from £95.2m the previous year, with both their housing and construction businesses increasing their pre-tax profit by 11%. Alongside this revenue jumped a third to £2.3bn up from £1.8bn last year. Finally the CITB present research by Barbour ABI, finding that three UK house-builders are among the strongest-performing construction firms in the UK in terms of revenue.

Source: Competitive Advantage Consultancy Ltd