Keystone Lintels Comment: Q3 2019

Derrick McFarland, Managing Director Keystone Lintels is BMBI’s Expert for Steel Lintels.

Quarter three started firm to flat and, while September’s performance was better than the previous year, the quarter overall ended as it started, firm to flat. With the Government’s deadline of 31st October looming, and then subsequently delayed, quarter four has started in a more reserved manner than last year.

The seasonally adjusted CIPS UK Construction total activity index rose to 44.2 in October, recovering some of September’s slippage to 43.3. This is close to the ten-year low seen in June, as domestic political uncertainty and economic slowdown weighed on demand. New orders dropped for the seventh month in a row and business confidence is among the weakest since 2012, according to IHS Markit. Looking ahead however, UK construction firms are mildly optimistic that volumes will improve through 2020.

Assuming the next Government can command a majority in parliament after 12th December, the questions remain. Will the Government put out the Brexit fire or continue to pour fuel on its constant flame? Will the 31st January 2020 end this nightmare, or will it get kicked down the road once more? This all suggests a subdued year ahead.

Once again we set plans in place to support our loyal customers after the end of January 2020 with a substantial stock of raw material and finished goods in the United Kingdom. By questionable fortune, we are now well-practised in this task.

Away from all the negativity, enquiry levels are fairly strong, the demand for housing hasn’t gone away, and mortgage rates are still low. As I commented in the last report, such low mortgage rates combined with modest wage inflation and softening house prices could be a good deal for buyers.

Looking forward to 2020, once things do finally become clear in Westminster, the market looks positive. But, to maintain our build programmes and supply a market that starts moving again, we believe that continuing access to EU labour and skills will be critical.

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Launched in 2015, the award winning monthly Builders Merchant Building Index (BMBI) report is the only reliable measure of repair, maintenance & improvement (RMI) activity in the UK. Filling an important gap, it can be widely used in construction, and by economists, Government, national media, commentators and influencers outside the industry.