Construction output figures expose impact of skills shortage

Housing Wed, Mar 23, 2016 10:39 AM

Gross domestic product grew by 0.5% between July and September, the Office for National Statistics (ONS) said, down from 0.7% in the second quarter.

The rate was also lower than the 0.6% growth predicted by many analysts. Part of the slowdown was due to the biggest fall in construction output in three years, a drop of 2.2%.

The drop in construction output could have been influenced by particularly wet weather in August, the ONS said.

"Overall, the picture of a steady recovery in the UK economy continues and we would now expect GDP growth of around 2.4% for the year as a whole," said John Hawksworth, chief economist at accountants PwC.

The ONS figures expose the growing impact of the construction skills shortage, according to the Federation of Master Builders (FMB).

Brian Berry, Chief Executive of the FMB, said: “The latest figures from the ONS will shake away any complacency that the recovery in the construction industry can be taken for granted.

"The inadequate number of skilled workers remains one of the greatest barriers to construction firms of all sizes being able to grow and prosper – this contraction in construction output could, in part, stem from the increased cost pressures that businesses face as a result of labour scarcity.

“However, the ONS figures should be approached with an element of caution. This is the first fall in output for more than two years and business sentiment remains positive. Indeed, the FMB’s latest State of Trade Survey for Q3 2015 marks the tenth consecutive quarter of growth in the SME sector. We look forward to hearing the Chancellors plans for the industry in November’s Spending Review. he UK economy's growth slowed in the third quarter of the year, weighed down by the performance of the construction and manufacturing sectors.

"Comprehensive measures on apprenticeships, housing and planning need to move forward for construction to continue to drive growth across the wider UK economy as it has in recent years.”