It has ridden the housebuilding boom, but when some infrastructure projects got binned in The Great Austerity that was a countervailing negative.
Volume in terms of general construction, rather than housebuilding, is paramount as profit margins are often low single-digit. And there has also been evidence that the sector’s exposure to commercial property has been hit by investment decisions being delayed until after Britain’s EU referendum on 23 June.
Yesterday’s latest sector data from the Office for National Statistics was again this same mixed bag. Construction output rose 2.5 per cent month‑on‑month in April.
So far, so good, particularly coming after a disappointing 3.6 per cent month-on-month drop in March. But that is where the cheer ends. The March performance was largely due to the early fall of Easter this year, and even with the overhang of the Brexit vote there were hopes construction could have totally made up that earlier slide. In addition, construction output was still down 3.7 per cent year-on-year in April, and down 2.1 per cent in the three months to April compared to the three months to January.
Therefore, performance has been deteriorating on the more meaningful quarterly and annual timeframes, with occasional individual monthly performance flattering to deceive.
When the EU referendum is out of the way, we may get a better picture over the rest of the summer and into autumn how healthy construction is.
I feel given the general economic backdrop we will see continuing variability from the sector for some time.
Giraffe idea gets it in the neck
I’m not surprised that Tesco chief executive Dave Lewis has flogged off the Giraffe restaurant chain that was the somewhat left-field brainchild of his hapless predecessor, Philip Clarke.
Giraffe would seem to have a better chance of success with chip shop owner Harry Ramsden that it ever would in a supermarket empire.