Manchester, 25 November 2019 – The UK construction industry has increased its R&D spending to a record high of £351m, the latest ONS data has revealed.

The total amount spent on R&D by businesses in the construction sector rose 9.7% annually, analysis by R&D tax relief specialist Catax shows.

This was a rise of £31m year on year, according to the latest ONS statistics1 for 2018 released last week.

Catax believes this is partly due to the increased interest in developing Modern Methods of Construction (MMC), an area that is soaking up huge resources as the country seeks to become a world leader in offsite construction.

The amount that UK businesses across all sectors have invested in R&D continues to grow, rising £1.4bn to £25bn in 2018 — up 5.8%.

Manufacturing was associated with £16.3bn of R&D spending, up 4.7%, but pharmaceuticals remained the biggest product group with £4.5bn of R&D spending, up 3.3%.

The telecoms sector plotted the largest percentage increase in R&D spending, climbing 25.4% to £947m.

The number of staff employed by UK businesses also continued to grow, rising 7.3% annually to exceed 250,000 full-time equivalents for the first time.

Mark Tighe, chief executive of R&D tax relief specialists Catax, said:

“The construction industry is a huge employer in this country but contributes a relatively small amount to the UK total of R&D spending.

“However, the sector is experiencing some interesting changes, not least the rapid growth of  offsite construction methods. This is likely to be a contributing factor behind this large jump in overall R&D spending last year.

“More broadly, this is the second full year that Brexit Britain has shrugged off the political poison after the EU referendum and posted great gains in terms of R&D investment, running head and shoulders above the long-term average.

“For the first time in history a quarter of a million people nationwide are engaged full time in keeping the UK at the cutting edge. This is going to make a huge difference to Britain’s prospects outside the EU.

“The rate at which UK businesses are adding R&D staff to the workforce remains impressive, virtually matching the previous year with a rise of 7.3%.”

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