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Construction sector downturn 'here to stay'

12 June 2018

All areas of the construction sector are now considered to be in decline, following the latest report from the Office of National Statistics (ONS) showing a decline of 3.4% in April.

The latest update follows months of reports showing concern on a number of levels, although many of these attributed the downturn to issues such as extreme winter weather conditions.

Although the sector is closely associated with the FM industry, it is unclear how this will affect it at present.

Industry experts commenting on the ONS report include Naismiths managing director Blane Perrotton, who described the sector's performance dashboard as "a sea of warning lights".

Mr Perrotton said that housebuilding had been performing better than other areas of the industry, but this had now also seen a decline and he stated: "The fall in new orders suggests the slide is here to stay."

Despite readily available finance, he described demand as "patchy at best", with most activity in North West England and the West Midlands.

Many projects were also being delayed "until after the Brexit fog passes", said Mr Perrotton.

Federation of Master Builders chief executive Brian Berry said the 3.4% downturn for the sector in April was the biggest "since the latter stages of the recession in August 2012".

Extreme weather, rising costs of materials and wages, skills shortages and depreciation of sterling were all cited by Mr Berry as contributing to the fall in construction output.

He further stated that FMB research showed that 84% of builders believe prices will continue to rise over the next six month.

With more than 8% of construction workers recruited from EU countries, Mr Berry said it is essential for the government to make it clear how the industry "can recruit these workers post-Brexit".

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