Legal Experts Say Slump Likely To Continue In Wake Of Brexit Vote
Experts say uncertainty prior to the EU Referendum could account for construction output falling by 2.1% in May, compared to the previous month.
Figures released by the Office for National Statistics (ONS) show the fall in May was almost a complete reversal of April's 2.8% rise in construction activity.
The ONS said that as construction output accounts for 6% of the UK’s Gross Domestic Product (GDP), in June it would have to increase by 1.9% to avoid having a detrimental effect on the wider economy.
Given data from the private sector which has already been released, it is unlikely construction output will grow by the amount needed to leave GDP unaffected.
We have seen in recent days that some political stability and ‘do not panic’ decisions from the Bank of England can have a stabilising effect post Brexit on financial markets and exchange rates. However they are for the short term.
The latest ONS statistics on construction output, which accounts for circa 6% of GDP, show a pre- Brexit fall which is in danger of having a drag effect on the wider economy.
This is likely to continue until we have some longer term stability which will only happen when there is a concerted political and economic agenda to stimulate growth. There’s a new Cabinet in town, let’s hope they don’t dither.
Gordon Anderson - Partner