Housing output falls for seventh month in a row

Housebuilding output dropped for the seventh successive month in December, according to the latest data from IHS Markit, although the research firm said the rate of slowdown was “modest”.

Overall, December was a bad month for the domestic construction industry, as researchers pointed to another sharp reduction in output, with the downturn persisting across civil, commercial and residential work.

IHS Markit said respondents to its regular monthly survey attributed the latest drop in their workloads to political uncertainty and subdued client demand ahead of the general election.

The firm’s activity index registered a score of 44.4 in December, down from 45.3 in November and below the 50 no-change value for the eighth consecutive month.

While housing slowed last month, civil engineering was by far the worst performer, with activity falling at the fastest rate since March 2009. Anecdotal evidence suggested political indecision and delays with contract awards for new projects had stymied work getting off the ground.

Sluggish demand held back price rises among suppliers in December, with the latest increases being the weakest recorded by the survey for almost a decade. Higher fuel and energy costs were the main drivers of rising input prices.

But while December was bleak, Tim Moore, IHS Markit’s economics associate director, said business optimism had recovered to its strongest level in nine months.

“Survey respondents cited confidence that a more predictable domestic political landscape and clarity on Brexit could deliver a much-needed boost to clients’ willingness to spend in 2020,” he added.

Commenting on the latest data, Max Jones, relationship director at Lloyds Bank’s infrastructure and construction team, said: “The industry will hope that 2020 brings more clarity, which will help boost confidence.

“Whether this happens or not is still to be seen, but either way the onus will continue to be on firms to invest.”