Construction in 2018/19

With the Brexit deadline fast approaching, and with it the continuing uncertainty, the UK construction industry output for 2018 is expected to be lower than 2017.

2018 has been a challenging year, with the Carillion collapse at the start of the year having a domino effect on the sector, resulting in an increase in the number of construction companies in the UK falling into insolvency. The ongoing uncertainty of Brexit also had a significant impact on 2018 with projects being delayed or cancelled as a result.

The outlook for the construction sector in 2019 continues to be weighed down by Brexit, which has resulted in a growth downgrade from 2.3% to 0.6%. With major Scottish Government infrastructure projects like the Queensferry Crossing and Aberdeen Western Peripheral Route now completed, the construction industry still highly depends on government projects to facilitate the expected growth in 2019.

Despite the difficulties in the sector, private housing continued to rise in 2018 and this trend is expected to continue during 2019. However, the commercial sector has reduced their outputs in office space and retail with an expected fall of up to 10% in 2018 and an estimated 20% in 2019 with investors fearing the Brexit unpredictability is too high to rationalise an upfront investment.

Steven Todd, Head of EQ Property & Construction, commented,

“The need to conclude on Brexit is paramount. All businesses particularly those in the construction sector are awaiting politicians to bring Brexit to a conclusion, so that businesses and individuals can plan ahead. The current uncertainty is just holding back potential investment in the sector.”

If you are looking for advice, support or further information, please contact our head of EQ Property & Construction, Steven Todd via steven.todd@eqaccountants.co.uk or call 01592 630055.