MMC helps UK construction sector hit £351m R&D spending

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The latest ONS data has revealed a record high of £351m in research and development (R&D) spending for the UK construction sector

Analysis by R&D tax relief specialist, Catax, shows the total amount spent on R&D by businesses in the UK construction sector rose by 9.7% annually. This amounted to a rise of £31m year on year, according to the ONS statistics for 2018.

Catax believes this is partly due to increased interest in 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 largest percentage increase in R&D spending, climbing 25.4% to £947m, was in the telecoms sector.

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 sector 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.

“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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