Construction output recovers, ONS figures show

Construction output recovers, ONS figures show

Construction output recovers, ONS figures show

Monthly output in the UK construction sector is expected to have grown by 1.9% in volume by May 2024, according to new figures from the Office for National Statistics (ONS).

The rise in monthly output, which follows a 1.1% decline in April 2024 (revised from a 1.4% decline), was driven by increases in both new work (2.7%) and repairs and maintenance (0.8%). Anecdotal evidence from survey results suggested that warmer weather contributed to the increased output in May, with the Met Office confirming that May 2024 was the warmest month on record.

At the sector level, eight of the nine sectors showed growth in May 2024. The main contribution to the monthly increase was a 2.8% increase in the total number of new homes, with both private and public new construction increasing in the month. The number of new infrastructure works increased by 3.5% and non-residential repair and maintenance increased by 2.1% in the month.

Construction output is expected to have fallen by 0.7% in the three months to May 2024, due to a 0.9% decline in new work and a 0.3% decline in repair and maintenance work.

Clive Docwra, director of property and construction consultancy McBains, said: “After previous statistics showed the construction sector lagging the modest acceleration in growth seen in other sectors, today’s figures are much better than expected.

“What is particularly encouraging is that growth was experienced in most sectors, with new home construction increasing by 2.8%.

“Whether these are the green shoots of recovery or not, however, is unclear. In the three months to May, output still fell by 0.7%, showing that growth remains fragile.

“Despite these returns, the sector still needs a boost and developers are hoping that Labour’s announcement this week to get the country building will lead to renewed investor confidence in both residential and commercial projects.

“Every sector within the industry will also be hoping for a period of economic stability to get the construction sector back on track in all respects.”

Scott Motley, head of program, project and cost management at AECOM, added: “An increase in production after three months of decline will give the construction sector a much-needed boost.

“Confidence will also be bolstered by the general election result and the clarity and stability that Labour’s parliamentary majority provides for the future direction of the country. Ambitious election promises combined with action in the first few days of government suggest that infrastructure will be a clear priority.

“However, these ambitions will only be realised with a new level of collaboration between government and the private sector from the outset. The construction sector will have a key role to play in helping government meet the technical challenges of rolling out large and complex projects – unlocking the wider economic and social benefits of infrastructure, including decarbonisation, while recognising the importance of winning public support for such plans.”