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Some information on how the EU referendum has affected the construction sector

The Office for National Statistics (ONS) revealed some figures which tell that there has been a decline in the construction output. This article is focused on providing the information regarding the effects of the EU referendum on the construction output. The results were announced by the ONS in August and September of this year and they show a decline in the construction output. The output figures for the time period between the months of April and July show that there have been decreases as compared to earlier in the year and also the last year’s same point. During the second quarter (Q2), the construction output reduced by 0.7% in comparison with the output between January and March, first quarter (Q1) for the year 2016. The comparison from the Q2 of the last year (2015) reveals that, this year, the output has reduced by 1.4%. What’s more is that, the output results in June 2016 are 0.6% lower as compared to the output results of May 2016. When the quarterly numbers are broken down further, it is observed that there is an overall decrease of 0.8% in new work owing to the fact that the total new housing (1.1%) and the infrastructure (3.7%) both decreased in the Q2. In fact, the big decrease in infrastructure has another information; it was the third successive quarterly decrease. This article provides some detailed information to explain the effects of the EU referendum that took place on 23rd June this year, on the output of the construction industry.

Read the complete article to learn more!

The role played by the EU referendum

One line in the report that stood out concerned the EU referendum, which has been and continues to be a source of much debate.

We’ve reported previously about the effects of Brexit and how organizations should prepare. Interestingly though, the ONS report states “there is very little anecdotal evidence at present to suggest that the referendum has had an impact on output.”

Granted, with the data in this ONS release running until the end of June, there hasn’t been much time to feel any impending effects of the decision to vote leave. However, there was plenty of uncertainty beforehand.

Despite this, the Federation of Master Builders (FMB) – the UK’s largest trade association in the construction industry – told us that house builders have seen little change since the referendum, which suggests that the fall in output is not related to the referendum.

An FMB spokesperson said: “Undoubtedly, the results that measured the construction sector’s health immediately preceding and following the vote looked disastrous. However, many house builders – both big and small – are reporting that things have actually changed very little since the referendum, and that demand for new homes remains buoyant.”

This feeling was backed by Paul Payne, Managing Director of One Way, a construction and rail recruitment company, said this only caused “some natural hesitation.”

He said: “While numerous people have suggested that Brexit presents challenges to the construction industry, the idea is actually a bit of a red herring and we’ve seen little change since the result, except for some natural hesitation brought on by the ‘Armageddon scenarios’ being pumped into the market.

“We’re as busy now as we were before the referendum.”

There isn’t agreement across the board for this opinion though, as demonstrated by Max Robinson, who owns Ace Work Gear – a business that sells construction safety equipment and workwear.

He believes the referendum has taken on an ‘immense role’ in the decrease in output. He said: “There has been a clear decline since the start of the year, but it became considerably worse for all sections in the construction industry (apart from public housebuilding, but even there we’ve noticed a slowdown), in June of this year.”

Author: John Train

The complete article can be accessed via the following link:

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