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Construction industry set for bumpy ride next year as sector still well and truly caught in grip of recession

03 December 2019
DWF | Commercialisation Report
Andrew Symms, construction and infrastructure partner at global legal services business DWF, comments on the latest CIPS/Market Construction PMI data for November.

Part of this commentary was used by BBC News on 03/12/2019 

"Like the manufacturing sector, which again shrank in November, construction is highly reliant on economic certainty and, as we all know, that has been in short supply, particularly in the second half of this year. 

"Admittedly, there was some sign of improvement in that the slowdown in the construction sector eased to its slowest pace in four months in November but the fact that the two largest contributions to the fall in output came from civil engineering and commercial construction is troubling. 

"The latest construction PMI data is unlikely to provide any real comfort given, like manufacturing, the sector remains well and truly in the grip of a recession. All the UK needs now is for the service sector to continue to shrink and the economic rout will be complete.

"There's nothing particularly new in the latest data. Brexit uncertainty is continuing to drain the life out of the construction industry with new orders still falling due to a lack confidence, making it inevitable that contractors are holding off replacing staff that are leaving and trying to cut costs wherever possible. And, of course, none of this is being helped by the general election.

"All the main political parties have made promises on infrastructure spending and solving the housing crisis but we've been here before many times and the reality is, even if the next government does give the construction industry a massive shot in the arm, the sector itself might then struggle to meet demand. As an industry, construction has relied for many years on builders from other parts of the European Union (EU), now it has a shortage of qualified bricklayers. Until the Brexit question is resolved not much will change. That could take most of next year regardless of who wins the election, so building contractors are should brace themselves for yet another bumpy year."

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