Construction upbeat depsite recent weakening in commercial sector activity
Despite weaker activity the UK construction sector remains relatively upbeat about the short-term outlook, according to the Q1 2017 JLL and Glenigan UK Commercial Construction Activity Index. The Index highlights that commercial construction activity in the 12 months to the end of Q1 2017 decreased to £15.0 billion, down 9.7% on the previous quarter. March data revealed a loss of momentum, particularly in the level of new build activity, which totalled £8.9 billion (down 13.7% q-o-q). Refurbishment activity was more resilient (down just 3.0% q-o-q).
The outlook for the UK construction sector will be clouded by the likelihood that UK economic growth will slow, with growth of 1.8% predicted this year followed by 1.4% in 2018. While some projects may be delayed amidst ongoing uncertainty, the governments’ emphasis on industrial policy could drive further construction starts, particularly in regional markets. With construction survey sentiment suggesting further expansion, the overall picture is cautiously optimistic.
The full report is available to download here.