Construction output records highest monthly growth since September 2020

Output in the UK construction sector has recorded the highest monthly growth in all work since September 2020, according to the Office for National Statistics (ONS).

Construction output records highest monthly growth since September 2020

Construction output grew by 1.6% in the month-on-month all work series in February 2021, because of a 1.5% increase in new work and 1.9% increase in repair and maintenance.

The level of construction output in February 2021 was 4.3% below the February 2020 level; while new work was 7.8% below the February 2020 level, repair and maintenance work was 2.2% above the February 2020 level.

The monthly increase in new work (1.5%) in February 2021 was because of growth in all new work sectors apart from infrastructure, which fell by 3.4%; the largest contributor to this growth was private commercial new work, which grew by 4.0%.

The monthly increase in repair and maintenance (1.9%) in February 2021 was because of growth in private and non-housing repair and maintenance, which grew by 4.7% and 2.6% respectively, offsetting the 8.6% fall in public housing repair and maintenance.

Construction output fell by 1.0% in the three months to February 2021 compared with the previous three-month period, because of a 1.6% fall in new work and 0.1% fall in repair and maintenance.

Following revisions in this release, 2020 annual construction growth has been revised down 1.5 percentage points to an annual decline of 14.0%; this is now the largest decline in annual growth since annual records began in 1997.

Mark Robinson, group chief executive at SCAPE, said: “The construction industry continues to be a valuable asset in the UK’s economic recovery, leading the fightback as the roadmap out of lockdown progresses and other sectors begin to develop greater confidence. Notably, contractors are successfully delivering growth, whilst closely managing the impact of the material supply issues, that are expected to continue throughout the year.

Maintaining this growth, however, will require a continued commitment among firms to ‘build back better’, with public sector-led regeneration breathing new life into local communities. Our own data indicates that there is a generous level of public buy-in for green, job-boosting investment so it’s crucial that new projects maximise social value outcomes. In doing so, firms are more likely to preserve healthy order books and be better placed to navigate any upcoming turbulence as emergency government schemes wind down.”

Clive Docwra, managing director of property and construction consultancy McBains, said: Today’s figures are another sign that construction industry is maintaining its recovery following the downturn over the last year.  Confidence is still fragile in some work sectors, but there’s a definite feeling of the glass being half full, rather than half empty.

Especially cheering is the growth in private commercial new work, which grew by 4%, suggesting that order books are beginning to be filled on a more regular basis.  Projects in many sectors have been paused while lockdown measures have been in place, but the lifting this week of restrictions in retail, hospitality and leisure will hopefully also kick-start investment in construction within these industries. 

Recovery will be a long haul however, as output still remains more than 4% below pre-pandemic levels.

One factor that could further affect the recovery are reports of materials shortages.  Cement, timber and steel are already in short supply, and where products like these are imported from countries experiencing surges in COVID cases, it’s having a particular impact.”

Gareth Belsham, director of the national property consultancy and surveyors Naismiths, added: “Not even the downward revision of January’s figure could take the shine off another strong month of growth for Britain’s builders.

“The construction industry still stands head and shoulders above all other sectors as the fastest growing part of the economy.

“A 1.6% monthly jump in output would be impressive at any time. But coming in the middle of a nationwide lockdown, it shows just how well the industry has managed to adapt to social distancing rules and speaks of the deep reserves of pent-up demand.

“Dig into the data and you can see just out hot parts of the industry are now running. Output among private sector housebuilders has surged by nearly 141% since its low point of 12 months ago, and infrastructure work has long since soared past its pre-pandemic level.

“With many housebuilders reporting full orderbooks and buoyant sentiment, the question now is whether yesterday’s scenes of shoppers returning to the high street will help retail construction pick itself up off the floor to join the party.

“Strong progress across the industry as a whole is creating growing pains, with materials prices surging as the supply chain struggles to keep up with demand.

“The Government’s statisticians have confirmed that 2020 was the worst year on record for UK construction. Grim though that milestone is, it’s starting to feel increasingly distant as contractors and their suppliers gear up for a sustained surge of demand in 2021.”

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