Recent official figures may point to a 1.4% decrease in output for the three months leading to October and a full six-month slowdown, but not all is as gloomy as may be first perceived. I would urge people to read further into the headlines.
From my own personal viewpoint, I meet with many industry decision makers and the feedback I am getting on the building products market is one of "we're not 100% sure, but for the time being it is business as usual", which is different to "here we go again".
As the below article highlights, the forecast for construction is of a 37% increase in forward-looking orders, mainly driven by HS2 awarding its main contracts. Coupled with this, the government is putting measures in place to attempt to release the £600bn infrastructure pipeline via their 'Transforming Infrastructure Performance' programme whilst developing skills in modern methods of construction. They are hoping this will, in turn, close the £15bn productivity gap the industry is witnessing.
And then, of course, there is the recent budget, with Philip Hammond announcing that housing is his number one priority. Other than promoted offsite technologies, his team have (eventually) recognised the need to review the beleaguered planning system, hoping to halt landowners locking investments in for a long period of time - if you own it, build on it. Hammond was quoted as saying it is not about pouring more money into the market, it is about releasing the supply chain. Here here Philip Hammond.
Additionally, the industry is driving for the National Housing Fund to borrow £10bn yearly for 10 years in order to build homes of 80-90% of market rate. This will in turn aid housing associations in potentially building 40,000 extra homes a year. A real stimulus for the market.
I appreciate the above will not cover all manufacturers routes to market (fit out, commercial by way of an example) but at least we should be moving into 2018 with a realistic focus on what may happen, rather than what certain publications and pockets of the press would want us to believe.
Latest Government construction output and orders figures suggest there is light on the horizon despite the biggest fall in workload for five years.