Will construction lead the way to a prosperous Brexit?

Most economists look at the construction industry as a real barometer in terms of trying forecast our financial future – all the more so since we voted to leave Europe. Government figures for building have been erratic at best over the last year but we are now starting to see a few glimmers of light.

While the latest statistics show that construction output fell three month on three month by 1.3%, following a growth spurt of 1.1% in the first quarter of 2017, things are not looking entirely gloomy.

Yes, there is still much uncertainty, particularly in the commercial sector. The latest figures reveal that output has been driven by falls in all new work, and repair and maintenance, which fell 1.3% and 1.4% respectively.

Add on the fact that month-on-month construction output also fell in June 2017, contracting for the third consecutive month and decreasing by 0.1% compared with the previous month, you might feel that this writer is being a little optimistic.

However, construction output still grew 0.9% compared with June 2016.

The month-on-month decline of 0.1% in June 2017 was driven by a 1.1% fall in all repair and maintenance, but was offset by a 5.1% increase in private housing, which reached its highest level on record.

To use the Government's words: “The estimate for construction growth in Quarter 2 (April to June) 2017 has been revised from negative 0.9% in the preliminary estimate of gross domestic product (GDP) to negative 1.3%, which has no impact on quarterly GDP growth to one decimal place.”

If you look beyond the jargon it means – no change.

OK, so the figures are not as good as the start of the year when UK construction activity rose to a four-month high, but these merely demonstrate the level of uncertainty and wait and see attitude from some of the country's largest clients.

Many manufacturers of construction materials are privately reporting big order books which are just waiting for the green light from contractors and clients to start work.

Pessimists will take this to read that things will just get worse as clients are not prepared to press the go button, but as I write this short blog we are seeing some massive new contracts being won in recent weeks and a new sense of optimism.

It could just be that construction once again leads the way and lights the path for a prosperous future outside of Europe.

By Talk Builder  Follow me on Twitter  @TalkBuilder