Dr David Crosthwaite, chief economist at BCIS, said: ‘A marked contraction in new work drove the annual fall in construction output in May. Every sector recorded a decline, with the sharpest falls in the private industrial and infrastructure sectors.
‘The latest data suggest confidence in commissioning new construction remains very fragile. Clients and funders are continuing to delay investment decisions amid ongoing geopolitical and domestic uncertainty, and there is a growing sense that this caution will persist until conditions stabilise or projects can no longer be postponed.
‘In the residential sector, recent trading updates from major house builders highlight macroeconomic uncertainty as an ongoing challenge. There is also concern over political uncertainty and the implications for planning, regulation and funding. In response to a difficult operating environment, some developers have reduced land buying and moderated the pace of new site starts.
‘Ultimately, something has to give. With ambitious national delivery targets in place, there is significant pressure on the new government leadership to provide the stability and certainty the industry needs to unlock investment and accelerate delivery. Construction businesses will be looking for clear direction and decisive action in the months ahead.’
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