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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
thing.

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.

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