24th March Journal Column

 By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

The end of 2016 marked the end of the industry as we know it. A lot of big, important decisions were made and there was a lot of uncertainty surrounding the impact they would have on the industry.  But despite the apprehension, mainly around the Brexit vote, it seems we ended the year on a high.

The latest Markit/CIPS UK Construction purchasing managers’ index (PMI) shows that output increased 1.8 per cent in December on the previous month and we ended the year on a high compared to the year before – so we must be doing something right. Output during the three months from September to November was 0.1 per cent down on the three months before, but still 1.6 per cent higher than a year ago. So, although output was marginally getting worse month-to-month, it was still much higher than it had been the year before and I’ll certainly take that!

The Office of National Statistics (ONS) showed that private commercial work, alongside housing, were the main drivers of growth. Data from ONS shows that all construction work reached a seasonally-adjusted index reading of 116.5 in December 2016, marking the second-highest output index figure since the monthly dataset began at the start of 2010. New housing work also increased in December reaching its highest level in six years (the index is based on 2013 figures representing 100).

According to new research, we’ll need to recruit more than two million staff in the next five years to deliver the number of homes we require. So, although we’re still struggling for skilled workers, we are actually working. The increase in output just goes to show that the industry cannot be discouraged and we will keep working to make our industry great.

While Decembers output was encouraging, figures suggested growth in the sector slowed down in January. But all hope is not lost, the survey also suggested confidence was high among companies in the industry, with 51 per cent forecasting a rise in activity this year. We just need to keep momentum going, get our heads down and hit our targets.

Going forward in 2017 I expect companies to become more cautious with the impact of Brexit looming, which, following Theresa May’s speech in January claiming the UK will leave the European single market and the EU customs union, might be even messier than we first originally thought. But, let’s not be disheartened, we had a lot of reason to be wary in 2016 and we’ve still managed to come out on top.