Recession predicted as Brexit hits construction

The vote for Brexit is starting to have an impact on the construction industry and the economy at large.

New figures released by Reuters, the Royal Institute of Chartered Surveyors and the Office for National Statistics follow warnings last month from the National Housing Federation.

  • A poll by Reuters of almost 60 economists has predicted that Britain will decline by 0.1% for the next two quarters and enter recession this year
  • Construction output from new housing fell by 3.6% from the first quarter of 2016 to the second, according to ONS figures
  • The Royal Institute for Chartered Surveyors survey of housing market activity showed a fall to the lowest level since April 2013
  • National Housing Federation analysis showed a slow in housebuilding similar to that of the 2008 recession would over the next decade:
  • Wipe out more than a third of GDP growth (£142.5bn)
  • Result in the loss of nearly 120,000 construction jobs.

David Orr, chief executive at the National Housing Federation, said: “We know that an uncertain economic environment will cause builders to put the brakes on. Our country’s prosperity and thousands of citizens’ livelihoods depend on a strong building sector – we cannot let a slowdown take hold.

“Housing associations have a track record of building through tough times, having upped their output through the last recession when private developers could not. With the right flexibility from government, and at no extra cost to the taxpayer, housing associations can keep the nation building.”

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