Work on the construction of major UK infrastructure projects has suffered its biggest fall since the financial crisis, as government indecision and political uncertainty caused by Brexit drags down the building industry.
According to the Chartered Institute of Procurement and Supply (Cips) and the data provider IHS Markit, civil engineering activity dropped last month at the fastest rate since October 2009, as ministers held back from making decisions on landmark road and rail schemes.
The latest snapshot comes amid heightened political uncertainty over large-scale building projects such as HS2 and the Heathrow third runway with MPs distracted from making decisions by Brexit. Key decisions have also been deferred until after next month’s election.
(January 1, 2009)
High Speed Two Ltd is set up by the Labour government to examine possibilities for increasing high-speed rail capacity in the UK.
(March 1, 2010)
The project is split into two phases - London to Birmingham forms phase one, with phase two extending the route to Manchester and Leeds.
(January 10, 2012)
The transport secretary, Conservative Justine Greening, announces the decision to build HS2.
(April 1, 2012)
A judicial review is called into the HS2 decision.
(March 15, 2013)
Lord Justice Ouseley upholds one of the 10 grounds for complaint about HS2 in the judicial review – the claim that the government had acted unfairly and unlawfully when consulting on compensation for homeowners affected by the route.
(November 3, 2013)
The Conservative prime minister, David Cameron, describes the project as "absolutely vital" as MPs approve funding. The high-speed rail (London-West Midlands) bill is formally introduced in parliament.
(June 1, 2015)
After freedom of information requests, a 2012 Department for Transport viability report into HS2 is released, revealing the department considered it unaffordable.
(December 21, 2018)
Allan Cook replaces Sir Terry Morgan as chair of HS2, after the latter fails to deliver the opening of the Crossrail project in London on schedule.
(March 1, 2019)
A report from the New Economics Foundation suggests HS2 will deliver the most benefit to London, and exacerbate regional inequality.
(August 21, 2019)
A fresh government review begins into HS2 into whether the scheme should be approved, amended or scrapped entirely.
(September 3, 2019)
The Conservative transport secretary, Grant Shapps, announces that full HS2 services between London and Birmingham will be delayed by up to five years to 2031, and that the final completion of the northern section of the high-speed rail network would likely be delayed by seven years until 2040. He also confirmed the budget had escalated from the official £56bn at 2015 prices to up to £88bn at today’s prices.
(February 11, 2020)
After a period of review, prime minister Boris Johnson announces that HS2 will go ahead, alongside a package of measures aimed at improving bus and cycling links outside of London.
Questions over the future of HS2 have been allowed to drift under Boris Johnson’s government, after the prime minister launched a review of the high-speed railway project, with a leading critic of the scheme as its joint author. A decision on HS2 is now not expected until after the election. Johnson has promised an infrastructure revolution to bring together communities after Brexit.
Tim Moore, economics associate director at IHS Markit, said that construction firms “voiced concerns about the uncertain outlook for large-scale infrastructure projects upon which growth is expected to rest in the coming years”.
The IHS Markit construction purchasing managers’ index (PMI) rose slightly to 44.2 last month from 43.3 in September, although remained significantly below the 50.0 level that separates economic growth from contraction.
Civil engineering was the worst-performing area. House building also dropped at a faster rate in October, while activity in commercial construction also dipped for the 10th month running.
The survey of construction firms, which is closely watched by the Treasury and the Bank of England for early warning signs from the economy, found that employment numbers continued a decline, with a fall in job numbers in every month since April.
Construction companies said domestic political uncertainty and fears over the economy had dragged down activity levels last month, as politicians failed to break the Brexit deadlock. Firms also said unusually wet weather in October had served as an additional headwind to construction activity.
Duncan Brock, group director at Cips, said: “To say these figures are disappointing is a big understatement. Given that the next political hurdle is December’s general election, all eyes will be on the new administration and clear direction, because at the moment there is little insight into what could possibly pull the sector out of its ditch.”
