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GDP figures show the need for planning reform

Following GDP growth of 0.4% in March 2024, April has seen no growth and in key sectors, such as construction, output has again dropped.

Richard Beresford, Chief Executive of the National Federation of Builders (NFB), said:

“The NFB Manifesto, ‘Supporting Construction to Power Growth’, was written with the UK’s GDP struggles in mind. While growth of the service sector should be celebrated, we should be desperately worried about the persistent drop in construction output and fluctuation of output in production.”

Service output rises were greatest in ‘information and communication’ and ‘professional scientific and technical activities’ but worryingly, ‘wholesale and retail trade, repair of motor vehicles and motorcycles’ saw a 0.20 percentage point drop, which caps a three month negative trend.

Production output fell by 0.9%, with mining and quarrying continuing to see the greatest drop of more than fifteen points since April 2022. Manufacturing continues to flatline.

Construction output fell by 1.4%, the third monthly fall, with ‘new work’ seeing the greatest drop. 17.4% of all insolvency was attributed to construction and insolvency in the sector is 36% higher than it was in 2019.

There is a concern that as new, less ambitious or higher cost planning policies start filtering through the system, insolvency will increase again.

Rico Wojtulewicz, Head of Policy at the NFB, said:

“When construction output drops, the economy suffers. This is because construction builds the roads and rail, premises for employers and investors, homes to tackle the cost of living crisis and everything else which enables growth in practice.

High speed rail, airport expansion, heat pump installs, electrification of buildings, freight transport, mining for manufacturing, energy generation and much more is either stalled, or made unviable because of the broken, delay ridden planning process. Until the UK gets a government which puts growth above fear of planning reform backlash from the vocal minority, we will continue to see a stumbling economy which cannot meet its potential.”

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