GPD Decline Hitting UK Construction

    According to recent figures, the UK economy’s been grinding
    its gears hard lately – and now it’s actually slipped into reverse. The Office
    for National Statistics is reporting that growth in Gross Domestic Product (the
    value of all the country’s goods and services produced) shrank 0.4% in a month.
    In fact the 2018 figures show that growth in the UK economy has now hit its
    lowest point since 2012. With an uncertain Brexit just weeks away and a skills
    shortfall crisis to contend with, these are uncomfortable numbers for the
    British construction industry.

    Overall, ONS figures for the building trade show:

    • Total construction output
      went town by 0.3% in the last 3 months of 2018, after having risen by 2.1%
      for the quarter before. The drop was mostly down to maintenance and repair
      output, which fell 2.8%.
    • The maintenance and repair
      drop came down to decreases of 4% in figures for private housing output
      and 2.9% in non-housing.
    • The blow was cushioned a
      bit by a 1.1% rise in overall new work. You can thank rises of 1.9% in
      infrastructure and 1.4% in private commercial work for that.
    • The latest monthly figures
      dropped badly, with December’s all-work series falling 2.8% compared to
      November. That’s the biggest one-month drop since  June 2012’s 4.3% plummet.
    • Looking back to 2017’s
      numbers, we’re seeing growth of 0.7% in construction over the last year.
      Again, that’s the lowest year-on-year growth rate since 2012, when output
      dropped by 6.9%.

    Needless to say, these aren’t great numbers – and there are
    likely to be some knock-on effects for the industry to deal with. A general
    unease over awarding new projects would be pretty understandable, for one

    A nervous atmosphere in the industry is exactly the kind of
    breeding ground that leads to stalled or abandoned projects – particularly when
    there’s the fear of rising costs to factor in.

    Work opportunities tend to dwindle down, and the looming
    threat of layoffs feeds into a broader perception of construction as a field
    weak on opportunity and prospects. With an ageing workforce and a skills
    shortfall, people are just leaving the industry and not coming back.

    Construction thrives on innovation, and is learning fast how
    to pull in talent from other fields. The other side to that, obviously, is that
    people with transferable skills will simply transfer themselves back out when
    the going gets too uneven.

    Putting it all in perspective, if you’re working in the
    building trade it’s a challenging time. At RIFT, we see more and more of our
    construction customers struggling over finding new jobs and making the most of
    existing ones.

    It’s more important than ever to make sure you’re paying the
    right amount of tax – and claiming back what you’re owed from HMRC. That takes
    expertise that few people have – and it’s the reason RIFT are the UK’s leading
    tax specialists. From welders to window fitters, when it comes to handling tax
    refunds in construction, you’re better off with RIFT.