Leading cost consultant Arcadis is warning that the current market cycle has reached its peak as unprecedented energy price rises make their impact felt.
But the firm predicts the looming slowdown will not be ‘blow-out’ like the 2008-2012 crash.
The industry instead is likely to experience a prolonged but shallow downturn rather than a hard landing in the face of present economic headwinds as the demand-side proves more resilient than the past.
Construction output fell for the second month in a row dropping 0.8% in July after June’s 1.4% fall.
The slide in monthly construction output in July came solely from a decrease in repair and maintenance (-2.6%) as new work saw a slight increase (0.3%) on the month.
At the sector level, the main contributors to the decrease were public housing new work, and public and private housing repair and maintenance, which decreased 13.1%, 8.0% and 2.6%, respectively.
Construction activity in the UK dipped for the second successive month in August according to the bellwether S&P Global/CIPS UK Construction Purchasing Managers’ Index.
The index was up slightly at 49.2 for August and from 48.9 but still below the crucial 50 no-change mark signalling another reduction in construction activity over the month.
Civil engineering posted the sharpest decline in activity while commercial work also declined ending a period of growth stretching back for a year-and-a-half and activity on housing projects increased for the first time in three months.
Controversial reforms to the tax status of self-employed workers will be scrapped next year.
Changes to the IR35 system were introduced in April 2021 making contractors responsible for determining the employment status of freelance workers.
The move was roundly criticised by former self-employed workers who saw their tax bills rise and contractors faced bigger bills from direct employment.
From April 2023 the system will revert back to its original rules with freelance workers assessing their own tax.