Following the sharp falls in the construction sector after the immediate aftermath of the Brexit vote, the residential sector in October unexpectedly reached a massive £2.3 billion worth of construction contracts on the month.
According to the November edition of the Economic & Construction Market Review from industry analysts Barbour ABI, the residential sector monthly contract value increased by 34 per cent in October when compared to September. Builders Taylor Wimpey and Persimmon both also reported growth in its order books, with the latter reporting a sales rates increase of 19%.
Overall for construction, contracts were up in October reaching £5.9 billion, a 5 per cent increase on the previous month. However several sectors have not recovered from the Brexit vote slump in the same way that residential construction has – in particular infrastructure, with contract values down 42 per cent in October compared to the same time last year. Commercial & Retail, Industrial and Medical & Health have all also struggled to gain momentum since July.
“Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “The turnaround for housebuilding this month will give industry leaders, investors and the government well needed breathing room. However the majority of the other construction sectors continuing to lag after the post-Brexit vote is a cause for concern, particularly infrastructure and commercial & retail, two sectors that are usually accurate indicators of how the overall economy is performing.”
“Housebuilding now beginning to thrive is no major surprise, as the strain on housing stock and government targets have become a matter of national attention. What did actually surprised was the significantly large value of residential construction contract this month, reaching £2.3 billion, the highest monthly figure ever recorded for residential construction since Barbour ABI reporting began back in October 2010.”