ONS highlights flat construction output growth during November

ONS highlights flat construction output growth during November

Monthly construction output saw flat growth (0.0%) in volume terms in November 2022 following an increase of 0.4% in October 2022, the Office for National Statistics (ONS) said today.

The flat growth in construction output in November 2022 was made up from a decrease in new work (down 0.4%), offset by an increase in repair and maintenance (up 0.6%), with six out of the nine sectors seeing an increase on the month.

At the sector level, the main positive contributors were seen in infrastructure new work and non-housing repair and maintenance, which increased 4.2% and 2.4% respectively. The main negative contributors were seen in private housing with new work and repair and maintenance falling 4.8% and 1.7%, respectively.

Anecdotal evidence from the Monthly Business Survey for Construction and Allied Trades continues the narrative around increased prices for certain construction products. However, prices have started to ease from their high level in mid-2022, as estimated by the ONS Construction Output Price Index (OPI) Quarter 3 (Jan to Mar) 2022 dataset. Despite declining slightly, anecdotal evidence suggests these historically high levels of prices are leading to more projects being placed on hold (whether temporarily or permanently).

SCAPE chief executive Mark Robinson has argued that maintaining any sort of resilience in the industry will rely on bolstering support for SMEs, who are most vulnerable to the effects of recession.

He said: “Sustained levels of construction output in late Autumn is welcome news but shouldn’t distract from the issues that contractors are currently facing – namely a recession caused by persistent cost pressures linked to inflation, labour, and materials supply.

“SMEs, which are the backbone of the construction industry, are particularly exposed to these challenges. Close engagement across the supply chain will be essential if the industry is to demonstrate resilience, and maintain a level of momentum across both public and private development throughout 2023.”

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