Construction industry performance in 2015
Interpreting the performance figures for the UK construction industry in 2015 has been no easy task. Due to the range of activities, the data is difficult to interpret year on year, but this year’s output is especially convoluted.
The data was recently downgraded by the Office of National Statistics and no longer carries the National Statistics status. How the data will be collected, reviewed and interpreted in the future is under review.
What Are the Issues?
One of the biggest problems in interpreting the information comes from the price fluctuations and changes in materials in the market. This year has seen huge changes, and trying to provide comparative figures has been near to impossible. As construction purchases are made in terms of volume and cost, the changes make the equation difficult. No single measurement is applicable. Likewise, the seasonal adjustment process calculations mean statisticians are looking at two different tables with no idea which table best represents the true picture of construction in the UK.
Furthermore, a new large company was included in the data, skewing the information in relation to last year’s sample. This shows up as around £2 billion extra in the construction economy from around March of last year onwards. All these factors have made identifying the previous year’s trends very difficult. Therefore what follows is a very limited conclusion.
Growth in UK Construction
From the data, we would broadly conclude that overall UK construction output increased by 3.4% in 2015. However, by taking out the information from the large company, we can see the output has remained rather flat. However, this can’t be seen as no change, because the flat output fails to show that new-build work has been rising while repair and renovation work has been falling. Other elements such as a land remediation service from service providers such as Ash remediation management would also be factored into this data.
Can We Trust the Data?
This is a good question. While many will be saying we can’t use this year’s data to make future trend predications, we can be sure of one thing: new-build construction is more buoyant than repair and maintenance. What’s more, this is typical once an industry leaves periods of recession. That said, this time around the construction industry will certainly need some time to heal.