New housing work has hit its lowest level since the UK voted to leave the EU, according to official data, with industry figures warning of more gloom ahead
The Office for National Statistics said £3.45 billion of fresh orders came into the residential building sector in the second quarter of this year. This was the lowest amount since the first three months of 2016.
Across the construction sector as a whole, a total of £10.92 billion of new orders was recorded from April to June 2019, the lowest level for more than six years.
The gloom was deepened by figures showing overall construction output fell by 0.8 per cent in the second quarter, leaving it one bad quarter away from a technical recession.
And separate data from the Chartered Institute of Procurement & Supply (CIPS), via its Purchasing Managers’ Index, showed construction activity declining for a fourth consecutive month in August.
The index also showed the sharpest fall in new work for more than a decade, and business optimism at its weakest since the economic crisis in 2008.
Gareth Belsham, director of national property consultancy Naismiths, said ‘calls simply stopped coming in’ for housebuilders during the second quarter of this year.
Belsham was among a raft of commentators pointing to the drawn-out and uncertain Brexit process as a source of concern for the industry.
‘After more than three years of crushing uncertainty, it’s no longer clear whether the deadlock stands a better chance of being broken by a no-deal Brexit or another delay,’ he said.
‘For now the cost of Britain’s endless limbo is etched in both the balance sheets – and the confidence – of British builders. Construction output is falling, orders are tailing off and as last week’s PMI data showed, confidence has fallen to its lowest level since the dark days of 2008.’
It’s only going to get worse as we rush headlong into becoming a fearful and myopic isolated island
Invisible Studio founder and anti-Brexit campaigner Piers Taylor said he was not surprised by the grim data. He said: ‘The UK is in freefall. If this is bad, it’s only going to get worse as we rush headlong into becoming a fearful and myopic isolated island.
’As we cut our ties with our neighbours, we cut our links with innovation, investment, and a pan-European network of collaborators. Isn’t news of these low orders exactly what Johnson wanted with his anti-business rhetoric?’
CIPS director Duncan Brock added: ‘As Brexit creeps closer and confusion still reigns, this will undoubtedly heap more pressure on the UK government to create much-needed clarity in the market.
‘The commercial sector particularly has been devastated by reluctant clients fearful of taking a wrong turn in a confusing landscape and delaying project starts.’
He added: ‘It’s likely September’s data will be even more discouraging.’