The UK is in recession and the Office for National Statistics have got the figures to prove it.

On the same day as fresh GDP figures showing that the economy had shrunk in 2023, the Office for National Statistics (ONS) also published data showing construction output decreased by 1.3% from October to December. Dubbed by Labour as ‘Rishi Sunak’s Recession’, the lack of growth in the economy is bad news for the construction sector. It also emerged that Japan has entered recession and some say that the USA is not far behind. 

National Building Specification (NBS) CEO Russell Haworth said: “Today’s GDP figures will come as little surprise to the construction industry, where a challenging economic climate has been putting the brakes on work starting on-site for some time. Restrained private sector investment, a housing market slowdown, weak UK economic growth, and high interest rates have repeatedly knocked the sector, suppressing activity.” Negative growth across two consecutive quarters is fuelling fears that the recession will continue to deepen and a lack of new orders is taking its toll on the construction industry.

Going, going, gone

Have you noticed those building sites where work has started then completely stopped?There is usually a sign announcing the new project, which may get increasingly weather worn as time goes on, and no building appears. According to Jeremy Hunt, Chancellor of the Exchequer, “High inflation is the biggest barrier to growth” so in the current climate, conditions remain extremely tough for some in the sector. 

Civil Engineering Contractors Association (CECA) Director of Operations Marie-Claude Hemming said: “Today’s figures show that cuts have consequences. In the year to November 2023, the highest number of construction firms fell into insolvency in a 12-month period since the Global Financial Crisis. This represents not just statistics in a spreadsheet, but people’s businesses and livelihoods. Failing to support the construction and infrastructure sector will always feed through to a decline in growth.”

More doom and gloom

If economic conditions weren’t enough of a problem, then there are other issues troubling the industry. Most notably, there is a shortage of skilled workers and some experts are warning that the sector needs to attract and retain top level talent. Highly trained workers returning to the EU, following Brexit, has caused a dip in the workforce and muddled training opportunities for young people has meant that “Construction needs over a quarter of a million extra workers by 2026” according to a report from the Construction Skills Network. More technical education pathways are needed in post-16 education to boost the numbers of young people entering the profession and avoid a serious skills shortage, which would hamper growth in the sector and the economy.

Not just men and mud

Last year, a new campaign was launched in the North West, with the snappy title: ‘Not just men and muddy boots’ which aimed to tackle skills shortages and an ageing workforce in the construction industry. Aimed squarely at young people, the campaign aims to entice new entrants into construction, including more women and more from ethnic minorities. History shows that recession is, eventually, followed by an upturn in the economy, so construction will rise again. Some experts in the Dark Arts of economic predictions, claim the UK is only suffering a mild recession and Chancellor Jeremy Hunt stated that “there are signs the British economy is turning a corner - forecasters agree that growth will strengthen over the next few years.” Well, he would say that wouldn’t he, as an election looms. 

Downturn, slowdown or pause? 

Whatever the experts want to call it, there are still many building projects going ahead or being completed in the UK and Veritas Surveying are experts in construction quantity surveying in a range of sectors including housing projects, retail and leisure and other areas within major construction projects. “Winter is coming” warned Ned Stark in ‘Game of Thrones’, but spring, a general election, and a newly resurgent construction industry, might be on the way too.